Energy
Friday, September 6th, 2024 3:47 pm EDT
Key Points
- Crude Oil Prices Plunge: Crude oil futures are facing significant declines, with Brent crude down 7.2% for its worst week since October 2023, and the U.S. benchmark, West Texas Intermediate (WTI), down 5.4% for its worst week since early May.
- OPEC+ Production Hike Delayed: OPEC+ has postponed its planned production increase of 180,000 barrels per day until December, but this decision has not alleviated concerns about potential oversupply in the market. The delayed increase is expected to add 2.2 million barrels per day back onto the market through the end of next year.
- Revised Price Forecasts: Both Bank of America and Citi have lowered their oil price forecasts. Bank of America projects Brent crude at $75 per barrel for 2025, down from $80, and U.S. crude at $71, down from $75. Citi expects Brent prices to average in the $60 range next year due to anticipated market surplus.
Crude oil futures are experiencing a significant decline this week, with Brent crude down 7.2% and on track for its worst weekly performance since October 2023, while the U.S. benchmark, West Texas Intermediate (WTI), has dropped 5.4%, marking its worst week since early May. This downturn comes despite OPEC+’s decision to delay a planned increase in production by 180,000 barrels per day until December. The production hike, which is expected to add approximately 2.2 million barrels per day back onto the market through the end of next year, has not alleviated concerns about potential oversupply.
As of Friday, West Texas Intermediate crude for the October contract is priced at $69.43 per barrel, reflecting a slight increase of 0.4% or 63 cents. Year-to-date, U.S. crude has decreased by 5.5%. Brent crude for the November contract stands at $72.97 per barrel, up 0.39% or 28 cents, but has declined 7.3% year-to-date. The October contract for RBOB gasoline is trading at $1.94 per gallon, up 1.04% or 2 cents, though gasoline prices have retreated 7.4% year-to-date. Natural gas for October is priced at $2.24 per thousand cubic feet, showing little change, but has fallen 10.5% year-to-date.
The anticipated return of these additional barrels coincides with a slowdown in oil demand from China, which is transitioning rapidly to electric vehicles, reducing its reliance on crude oil. This shift is contributing to market concerns about oversupply. Reflecting these concerns, Bank of America has revised its oil price forecast for 2025 downward, projecting Brent crude to average $75 per barrel, down from a previous estimate of $80, and U.S. crude to average $71, down from $75. Citi has a more bearish outlook, predicting Brent prices to average in the $60 range next year as the market is expected to face a significant surplus.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/09/06/crude-oil-prices-today.html
