Brent oil price likely to be above $80 a barrel by year end, shows Bloomberg survey

Bloomberg Intelligence’s (BI) February oil-price survey reveals insights into the outlook for oil prices by the end of 2024. According to the survey, a majority of respondents, 53 per cent, anticipate Brent oil to surpass $80 per barrel, which is seen as the price floor targeted by OPEC+. Only 5 per cent of respondents expect prices to exceed $100 per barrel.

The survey also highlights shifting sentiment regarding peak oil demand, with just 24 per cent of respondents foreseeing it before 2030, compared to almost 50 per cent in the previous year’s survey.

Additionally, despite notable geopolitical tensions, 92 per cent of respondents believe there is currently a geopolitical risk premium of less than $5 per barrel attached to oil prices.

Salih Yilmaz, senior industry analyst at Bloomberg Intelligence, commented on the impact of recent geopolitical events on oil prices. Yilmaz noted that while turmoil in regions like the Red Sea and the Israel-Hamas crisis has had limited effects on prices due to minimal disruption to oil flows and OPEC+’s spare capacity, geopolitical risks may gradually influence oil prices more significantly.

Primary drivers of Brent oil prices

The BI survey also reveals divergent opinions on the primary drivers of oil prices over the next two years.

While 27 per cent of respondents point to OPEC+ policy and another 27 per cent highlight China’s demand story, 22 per cent believe non-OPEC+ supply growth will be a significant factor, and 14 per cent mention Fed policy and interest rates.

Yilmaz emphasised that geopolitical developments have played a crucial role in recent oil price movements, although only 10 per cent of respondents expect them to be the primary driver in the coming years.

Regarding the future of the OPEC+ alliance, more than half (55 per cent) of respondents anticipate its continuation into 2025, despite some tensions among members. This marks a decline in confidence compared to the previous year’s survey, where 76 per cent expressed belief in the alliance’s unity.

In other news, Bloomberg announced the new Bloomberg Commodity Murban Crude Oil Index, aimed at tracking the performance of rolling futures on Murban Crude Oil. The new offering is a subindex of the flagship Bloomberg Commodity Index and reflects the return of underlying commodity futures US dollar price movements only.