Barclays cuts 2024 Brent forecast on resilient US production and Venezuelan supply

(Reuters) – Barclays cut its 2024 Brent crude oil price by $4 to $93 a barrel on Wednesday, citing resilient U.S. oil supply and higher output from Venezuela following the easing of sanctions on the producer Latin america.

Oil prices fell to their lowest level in more than three months on expectations of weaker demand in the United States and China, with Brent futures trading at $80.50 a barrel by 1311 GMT. (OR)

The lifting of sanctions on Venezuela’s oil sector in October added supplies in a market strained by OPEC+ production cuts.

Oil prices also gave up some of last month’s gains, which were driven by fears that an escalation in the Israel-Hamas conflict could disrupt supplies from the Middle East.

The U.S. Energy Information Administration said Tuesday that U.S. crude oil production will rise slightly less than previously expected, but demand will fall.

But Barclays said the oil price forecast was still above consensus and the forward curve, noting that the outlook for demand had strengthened. It raised its demand estimate for China by 200,000 and 300,000 barrels per day for 2023 and 2024, respectively.

“The recent decline in prices is driven primarily by resurgent demand concerns and not by the diminishing geopolitical risk premium,” the bank said in a note.

Oil prices should remain relatively high at least until the end of this decade, “as despite the ongoing transition, supply appears tighter,” the bank said, setting the fair value for Brent over the 2025-2030 period at $80 a barrel. barrel.

(Reporting by Anushree Mukherjee in Bengaluru; Editing by Barbara Lewis)