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Oil analysis and price forecast October 2023, 2024, and beyond: Is there more upside??

Oil price predictions 2024
Cristian Cochintu
Cristian Cochintu
17 October 2023

Crude oil prices have rallied since the beginning of Q3 2023 with prices hitting fresh yearly highs on both Brent and WTI crude respectively. Oil prices remain in a strong uptrend with bullish fundamentals supporting the move, although seasonality may provide a slight headwind for gains. Here are the latest Oil forecasts and price predictions for 2023. 

Oil prices rose in Q3 in line with our forecast, but their pace and level reached far surpassed the institutional price predictions of $70-80. In fact, it enjoyed its best quarter of the last three years, when it rebounded from negative prices. The Brent crude oil price averaged $94/b in September, $8/b higher than in August, and $19/b higher than in June. 

The $8/bbl gains in September are largely due to OPEC’s announcement to maintain production cuts through to the end of 2023 – agreed by both Saudi Arabia and Russia. A major driving force for this decision may have been the lower revisions in oil demand as represented by the OPEC September 2023 monthly oil market report. Additionally, crude oil futures rose by $4/bbl after Hamas attacked Israel on 7 October as traders reassessed geopolitical risks. However, gains subsequently dissipated in early October as renewed macro concerns took hold.

October and November have historically been the weakest months of the year for crude oil over the past 44 years, with December only providing modest gains. Seasonal patterns could provide some headwinds in Q4 or prompt some bulls to book profits or scale back bullish bets as we near the year-end. 

Oil Forecast & Price Predictions – Summary  

  • Oil price prediction Q4 2023: Whilst a move above $100 seems possible in Q4, it remains debatable as to whether it can close above it after such a strong Q3. EIA forecasts WTI to average $86.65 in the last quarter of the year, and BRENT to average $90.65. 
  • Oil price prediction 2024: Extended voluntary cuts to Saudi Arabia's crude oil production and expectations of higher global demand have raised the institutional forecast to $95-100 for BRENT and $90-95 for WTI. 
  • Oil price prediction for the next 5 years and beyond: some expect demand for fossil fuels could fall in the medium-to-long-term, leading to a lower oil price in 5-10 years’ time. EIA expects the average Brent crude prices at $61/bbl in 2025 and $73/bbl in 2030.  

With you can trade WTI Crude Oil and Brent Oil futures through CFDs if you want to speculate on price movements and trade or invest in Oil stocks and Oil ETFs.  

Crude Oil Forecast Q4 2023 - Escalating risks 

Markets are on edge due to a dramatic increase in geopolitical risk in the Middle East, which accounts for more than one-third of all seaborne oil commerce worldwide. When markets opened following the unexpected Hamas attack on Israel on October 7, traders priced in a $3–4/bbl risk premium. Since then, prices have stabilized; at the time of this Oil forecast & price predictions update for Q4, benchmark Brent futures are trading at about $87 per barrel. Although there hasn't been a noticeable effect on the physical supply, as the crisis develops, markets will continue to be on edge.

After Saudi Arabia and Russia extended their voluntary production cuts through the end of the year and as crude oil and distillate inventories decreased to very low levels, oil prices have spiked to about $98/bbl in mid-September. The market's emphasis was drawn to rising prices by the possibility that 'higher for longer' interest rates might impede demand and economic growth.

Early in October, Brent futures fell more than $12/bbl to $84/bbl as supply concerns were replaced by deteriorating macroeconomic indicators and indications of demand destruction in the US, as petrol supplies fell to levels not seen in two decades. Due to currency effects and the withdrawal of subsidies, the destruction of demand has been particularly severe in emerging markets.

However, growth is still accelerating in China, India, and Brazil, which sustains increases in world oil forecasted demand for this year of about 2.3 mb/d, with China accounting for 77% of that increase.  

Non-OPEC+ producers will account for the majority of the 1.5 mb/d and 1.7 mb/d increases in global supply this year and next. Although Iran is on track to become the second-largest source of growth in the world after the United States, the OPEC+ group's output is on the decline this year. Since OPEC+ may pump 1.3 mb/d less than the required amount of its crude in 4Q23, voluntary cuts are anticipated to keep the oil market in deficit. The balance might change to surplus in January if additional cuts are unwound, which would go some way toward replenishing depleting supplies. Global oil stocks as seen by observers fell by 63.9 mb in August, with crude oil falling by a staggering 102.3 mb.

Heading into the winter in the Northern Hemisphere, middle distillate markets remain constrained. European refiners are still having trouble increasing processing rates and diesel output ten months after the EU embargo on Russian oil went into effect. It will be necessary to import a lot of petrol oil over the long term, but the supply pool is constrained by strict winter quality requirements. To avert shortages, another mild winter might be necessary.

Uncertainty surrounds the Middle East crisis, and things are moving quickly. The international community will continue to be intensely focused on threats to the region's oil flows against a backdrop of closely balanced oil markets.  


Global Oil supply forecast October 2023

Russia, the largest non-OPEC+ producer within the group, and Saudi Arabia have steadily reduced production over the year, contributing to falling global oil inventories and limiting global crude oil production growth in 2023. Other OPEC+ members have struggled to sustain production at agreed-upon targets, further limiting global crude oil supply in 2023.  

EIA forecast that OPEC+ crude oil production will average 38.2 million b/d in 2023, about 1.4 million b/d less than in 2022, before falling further to 37.8 million b/d in 2024.  

The agency forecast global liquid fuels production (crude oil and other liquids) will increase by 1.3 million b/d in 2023 and by 0.9 million b/d in 2024. We forecast that non-OPEC production will increase by 2.2 million b/d in 2023, more than offsetting the decline in OPEC output. Production growth outside OPEC is driven by new project starts in North America and South America. Forecast non-OPEC production will grow by 1.0 million b/d in 2024 as new projects in Guyana and Brazil continue to add supply and the United States and Canada increase production. 

Global Oil Demand Forecast October 2023 

The Organization of the Petroleum-Exporting Countries (OPEC) and the IEA, which represents industrialized countries, have clashed in recent years over issues such as the long-term oil demand outlook and the need for investment in new supplies.

According to the latest IEA Oil Market Report, global oil demand growth is forecasted to slow to 900 kb/d in 2024 as the post-Covid rebound runs out of steam while the economic expansion slows and energy efficiency improvements weigh on oil use.

By contrast, in its latest report, OPEC stuck to its forecast that demand will rise by 2.25 million bpd in 2024. The difference between the two forecasts - 1.37 million bpd - is equivalent to more than 1% of daily world oil use.

At the same time, EIA forecasted global oil demand in 2023 at 100.92 million b/d, and growing to 102.24 million b/d in 2024, lowering its outlook by 50,000 b/d for 2023 and 90,000 b/d for 2024.

Oil forecast demand 2023

Source: EIA 

With global oil supply growth limited by OPEC+’s actions, the EIA forecasts global oil demand to outpace world production for the latter half of 2023 and much of 2024, putting upward pressure on oil prices.

Oil demand growth is an indication of likely oil market strength, and can affect prices and fuel costs for consumers and businesses. It also forms part of the backdrop for supply policy decisions by OPEC and its allies, known as OPEC+.


Global Oil Inventories Forecast October 2023 

The EIA anticipates that the production reductions and rising demand will result in a decrease in global oil inventories, pushing up oil prices until the end of this year.

The research also mentioned that the change from gains in global oil inventories in the first half of this year to draws through the end of the year is anticipated, which would again put upward pressure on global oil prices.

In the first half of 2023, global oil inventories grew by an average of 600,000 barrels per day (bpd), and according to the EIA, they will decline by an average of 400,000 bpd in the second half of the year.

The government also forecast modest increases in inventories in 2024, which will cause some downward pressure.  

Technical Oil Prices Forecast Q4 2023 - How High Can It Go?  

Crude oil may struggle to overcome the resistance, at least on the initial try, because of overbought conditions and negative divergence on charts of shorter timescales (increasing price accompanied by a stalling in momentum). With $91 for BRENT and $88 for WTI as significant levels previously, oil prices could consolidate, while possible pullbacks from here, bring $82 into focus.

BRENT and WTI Oil Technical Analysis and Price Forecast – Weekly Chart

The weekly BRENT and WTI charts are peaking their heads above the $90.00 and $87 marks but have yet to build the confidence to push higher just yet. The Relative Strength Index (RSI) is nearing overbought territory, but this does not rule out additional upside before then. Crude oil may see some pullback as prices near these extreme levels and revert to the mean (moving averages). It may be unwise to trade against the prevailing uptrend but possibly look for pullbacks to find opportunity (fundamental dependent).

BRENT Oil Technical Analysis and Price Forecast Q4 2023
WTI Oil Technical Analysis and Price Forecast Q4 2023

The actual uptrend started at the beginning of Q3 2023 is a 50% intermediate trend countertrend of the 1-year downtrend. The failure below the 50% Fibonacci retracement level signals a consolidation or downside continuation in the coming months or even quarters.   

BRENT and WTI Oil Technical Analysis and Price Forecast – Daily Chart

The daily charts show oil prices consolidating the 23.6% Fibonacci level after testing the 38.2% retracement level of the Q3 upside movement.

With trendline broken and obvious weaknesses, the technical analysis of Oil forecasts points towards a downward tendency. A break below the 50% levels, $83 for BRENT, and $81 for WTI signals a resume of the prevailing downward trend.

BRENT and WTI Oil Technical Analysis and Price Forecast Ocrober 2023
WTI Oil Technical Analysis and Price Forecast Ocrober 2023
However, if the prices rise above the previous high, $91 for BRENT and 88 and for WTI, it is a bullish signal and prices should remain relatively elevated throughout Q4.  

To learn more about technical analysis as a forecasting tool visit CAPEX Academy

Oil Brands 

When talking about the commodity oil traded on the financial markets, we can distinguish two types. The most popular, and also the most traded, is the American oil called WTI. The other popular variant is Brent

West Texas Intermediate (WTI) 

Light sweet crude oil (WTI) is widely used in US refineries and is an important benchmark for oil prices. WTI is a light oil with a high API density and low sulfur content. This determines the density of the oil in relation to water. WTI oil is widely traded between oil companies and investors. Most trading is done through futures through CME Group. The Light Sweet Crude Oil (CL) future is one of the most traded futures worldwide. 

Most of the oil of this type is stored in Cushing, an important hub for Oklahoma's oil industry. Here are large storage tanks connected to pipelines that transport the oil to all United States regions. WTI is an important feedstock for refineries in the Midwestern United States and on the coast of the Gulf of Mexico. 


Brent Crude Oil 

Brent oil is an important benchmark for the petroleum rate, especially in Europe, Africa, and the Middle East. Its name is derived from the Brent oil field in the North Sea. This Royal Dutch Shell oil field was once one of Britain's most productive oil fields, but most of the platforms there have since been decommissioned.  

The correlation between these two futures' price development is high, and we have seen several times in recent years that Brent's price was more than $10 higher than usual. At the end of 2020, the difference was approximately $3. Such differences are caused, among other things, by supply and demand, including the costs of shipping or storing oil. 


Why is the oil price so volatile? 

Oil prices are extraordinarily volatile because supply and demand for oil are inelastic or unresponsive to price changes. And that comes from the fact that oil is a must-have commodity for which there are few scalable substitutes. And on the supply side, oil production requires years of upfront capital expenditure to begin the flow. But when the oil starts flowing, the operating costs are low. 

So when you have a commodity for which demand is very inelastic and supply is inelastic, whenever you have an imbalance between supply and demand, you need huge price swings to effectuate just small changes in consumption and production. So basically oil's a very inelastic commodity on the supply and the demand sides in the short run. That's the main reason why crude oil prices are so volatile. 


How do analysts see the market moving in the coming months and years? Below, we look at some of the latest projections. 

Oil price and the US Stock Market 

In the past few years, the price of Brent crude oil has often, but not always, moved in the same direction as the US stock market. For example, from the second half of 2020 (2H20) through 2021, the Brent crude oil price and the value of the S&P 500, an equity index of widely traded U.S. public companies, both increased as economic growth was reflected in the rising profitability of companies as well as in rising demand for oil. 

Oil price predictions and the US Stock Market

Oil prices and equities began moving in opposite directions in early 2022 when the price of crude oil continued increasing as Russia’s full-scale invasion of Ukraine intensified global petroleum supply concerns. These price increases contributed to higher inflation and input costs for companies, leading to a decline in the USA 500, US Tech 100, and USA 30. As the Federal Reserve has increased interest rates to curb inflation, borrowing costs for companies have grown and expectations for economic growth have declined, putting further downward pressure on the S&P 500. However, from July to September 2022, the price of Brent crude oil resumed a positive relationship with equity prices, with both declining as concerns about global economic conditions also reduced expectations of petroleum demand growth, accompanied by pressure from the strong US dollar. 

Oil price and inflation expectations 

Inflation expectations also often move together with crude oil prices. One measure of inflation expectations is the percentage difference between yields for five-year Treasury Inflation-Protected Securities (TIPS) and U.S. treasury bonds. This spread indicates expectations for what the inflation rate will be in five years. Inflation expectations peaked in March at 3.6%, decreasing in recent months in part due to: 

  • Inflation, as measured by the U.S. Consumer Price Index, has flattened and slightly decreased recently, in part because energy-sector inflation has slowed down as oil prices have dropped; and 
  • Expectations for future economic activity, have also fallen. 

Although the price of Brent crude oil continued to increase from April to June when inflation expectations were decreasing, persistent concerns about economic conditions and petroleum demand have contributed to crude oil prices decreasing with inflation expectations from July through September. 

Oil Price Prediction for Q4 2023, 2024, 2025-2030 

Oil price prediction

The WTI and Brent crude oil prices are forecasted to increase in the coming months, reflecting EIA's and IEA's expectations of tightening balances in global oil markets. With new developments in the past weeks, what are the latest crude oil price predictions?

BRENT and WTI Oil Price Predictions Q4 2023 & 2024

Here are the most important oil price predictions released by some of the most influential financial institutions in the world today.

EIA - Oil Price Prediction Q4 2023 & 2024 Adjusted  

With global oil supply growth limited by OPEC+’s actions, the EIA expects global oil demand to outpace world production for the latter half of 2023 and much of 2024, putting upward pressure on oil prices.

The agency more narrowly adjusted its forecasts for oil prices in 2023, lowering its Brent price prediction by 37 cents to $84.09 and nudging down by 6 cents its WTI price prediction to $79.59/b. But it noted that Brent crude prices jumped nearly $20 in the three months from June to September 2023, averaging $94/b.

In its October Short-Term Energy Outlook, the agency increased its 2024 forecast for Brent crude oil by $6.69 to $94.91/b and forecasted WTI crude oil in 2024 to average $90.91/b, up $7.69 from last month’s estimate for the year.

Goldman Sachs Raises Oil Price Forecast for 2023-2024

After Saudi Arabia and other major oil producers announced voluntary production cuts, crude oil bull Goldman Sachs has raised its forecast for Brent crude oil prices by the end of 2023 from $90 to $95, and by the end of 2024 from $97 to $100.

Goldman Sachs pointed out that OPEC + currently has stronger pricing power than in the past, and this unexpected production cut is consistent with their new principle of pre-emptive strikes because they can act without significant loss of market share.

Barclays hikes 2024 Brent crude price forecast on tighter balance view

Barclays raised its Brent price forecast for 2024 by $8 per barrel to $97 a barrel as it expects market balances to tighten further next year: "Slowing non-OPEC+ supply growth, driven primarily by the US, and persistent underproduction from several OPEC+ producers due to structural constraints bolsters our core thesis behind a constructive view on oil prices,"

Barclays forecasts a supply deficit of 670 thousand barrels per day (kb/d) in 2023 and 250 kb/d in 2024 and recommends going long the $90-$95 per barrel call spread on January 2024 Brent contract at a net cost of $1.1 per barrel.

However, the bank lowered its 2023 Brent forecast by $3 per barrel to $84 per barrel but left fourth quarter outlook unchanged at $92 per barrel. 

Citi Oil - Price Prediction 2023: Brent $80, WTI $75 

Citi said that oil demand growth next year is going to be around 1.2 or 1.3 million barrels a day. Their base case is that supply will be growing by twice that amount over the course of the next year, a good bit of that coming from the Western Hemisphere, from the US, Brazil, Canada, Guyana, Argentina, maybe Venezuela, and even Mexico. Citi forecast Oil to stay flat during 2023. 

JPMorgan - Oil Price Prediction 2023: Brent $90 

JP Morgan's forecast of $90 Brent in 2023 rests on the view that the OPEC+ alliance will do the heavy lifting to keep markets balanced next year. They expect supply to grow at 30% above the pace of demand in 2023, as Russian production fully normalizes and a combination of conventional (Brazil, Norway, Guyana) and nonconventional projects (US, Canada, Argentina) supplies an additional 1.6 mbd. 

OPIS Oil Price Prediction 2023: Brent $95-96, WTI $90 

OPIS forecast that 2023 will see a price of $90/bbl a reasonable prophecy for WTI, with $95-$96/bbl likely for Brent. Precisely how high these numbers move above the average will depend on the successful reopening of China and the ability of western countries to avoid a significant recession. 

Infrastructure Capital Advisors - Oil Price Prediction 2023: $80-$100/barrel 

ICA expects oil to trade in the $80-$100 range while the Ukrainian war continues," adding that "China oil demand likely to recover as it emerges from zero-COVID lockdown policy." 

Reuters - Oil Price Prediction 2023 

Oil prices are set for small gains in 2023 as a darkening global economic backdrop and COVID-19 flare-ups in China threaten demand growth and offset the impact of supply shortfalls caused by sanctions on Russia, a Reuters poll showed on the beginning of the year. 

A survey of 30 economists and analysts forecast Brent crude would average $89.37 a barrel in 2023, about 4.6% lower than the $93.65 consensus in a November survey. The global benchmark has averaged $99 per barrel in 2022. 

U.S. crude is forecasted to average $84.84 per barrel in 2023, versus the previous month's $87.80 consensus.  

BCA Research - Oil Price Prediction 2023 

BCA expects 2023 Brent prices to average $115/bbl with an upside bias. This is partly driven by their expectation the Chinese Communist Party (CCP) will be successful in reversing three years of the zero-Covid policy after a chaotic start to re-opening the economy. They expect Chinese oil consumption to fall in January by 500k b/d. After that, demand will pick up in late 1Q23 and through the rest of the year, unleashing 700k b/d of pent-up oil-demand growth next year vs. 2022 levels, as consumers increase travel and spending at home and abroad. 

ING - Oil Price Prediction 2023 

ING also published its oil price outlook for 2023 and remained bullish. 

According to the Dutch Bank, a combination of lower Russian oil supply and OPEC+ supply cuts means that the global oil market is expected to tighten over 2023. ING expects a growing deficit over the course of the year, which suggests that oil prices should trade higher from current levels. 

ING currently forecast ICE Brent to average US$104/bbl over 2023 but added that uncertainty around their oil forecast is high given the geopolitical situation and the direction of the global economy. 

Algorithm-based (AI) Oil Price Forecasts  

Crude oil is expected to trade at 90 USD/BBL by the end of this quarter, according to Trading Economics global macro models and analysts' expectations. Looking forward, they estimate it to trade at $98 in 12 months' time.  

Brent crude oil is expected to trade at $93.4 USD/BBL by the end of this quarter, according to Trading Economics global macro models and analysts' expectations. Looking forward, they estimate it to trade at 96.70$100.7 in 12 months' time.  

Long Forecast expects Brent Oil to close 2023 at $90 with a maximum of $91.6 in December, while WTI to close 2023 at $86 with a maximum price of $87 in December.

Wallet Investors forecast Brent Oil to close 2023 at $89.6 with a maximum price of $90.56 in November, while WTI to close at $85 with a maximum price of $86.70 in November. 

Oil Price Forecast for the Next 5 Years and Beyond (2025 – 2050)

Some expect demand for fossil fuels could fall in the medium-to-long term, leading to a lower oil price in 10 years’ time. Consequently, the oil price in 2030 is widely expected below $100/bbl. 

According to EIA’s annual energy outlook report, the agency held a conservative outlook for its oil price forecast for 2030. It expects the average Brent crude prices at $61/bbl in 2025, $73/bbl in 2030, $80/bbl in 2035, $87/bbl in 2040, $91/bbl in 2045 and $95/bbl in 2050. 

Energy consultancy Wood Mackenzie said if global fuel consumption falls in line with the emission targets set to limit global warming, oil price projections in 2030 could fall as low as $40/bbl. 

Wallet Investor forecast WTI Oil to trade at $102 at the end of 2025, while the Brent Oil price prediction 2025 is $112. 

The Oil price prediction for 2025 at LongForecast is: WTI $94, Brent $102. 

The Oil price forecast for the next 5 years is $102 for WTI and $129 according to Long Forecast and $136 for WTI and $146 for Brent according to Wallet Investor. 

When looking for oil-price predictions, it's important to remember that analysts' forecasts may be wrong. This is because their projections are based on a fundamental and technical study of WTI and Brent oil commodities’ historical price movements. But past performance and forecast are not reliable indicators of future results. 

It is essential to do your research and always remember your decision to trade depends on your attitude to risk, your expertise in the market, the spread of your investment portfolio, and how comfortable you feel about losing money. You should never invest money that you cannot afford to lose. 

How Did the Price of Crude Oil Change Over Time? 

Below is a chart showing the price for West Texas Intermediate (NYMEX) Crude Oil over the last 5 years. The shown prices are in U.S. dollars. On the chart, you can clearly see the monstrous drop that happened earlier this year, and how the price has been going up and stabilizing in the months thereafter.   

A Recent History of Oil 

At the end of April 2020 (due to the Saudi and Russia conflict - more on that later), the oil price crashed, and the May WTI future even dipped below $0. The stock markets recovered strongly during the summer, and the oil price had also found its way up again. In August, the oil price rose well above $ 40 a barrel. With that price, the largest oil companies got some air also, but it is still far from enough for most to make a profit. 

At the beginning of September, the oil price had suddenly fallen hard again. Simultaneously, with the mini-crash with the US stock markets, a crude oil barrel's worth dropped by about 15% to below $37 a barrel. This brought the oil price back below $40 a barrel for the first time since July. The drop is partly because Saudi Arabia had lowered its sales prices for October and the fear that the number of COVID-19 infections will increase rapidly in several countries. 

The rebound in the number of infections could thwart the global economic recovery and decrease fuel demand. With several refineries lowering tariffs again, it seems they want to prevent oil stocks from rising back to record levels. The oil price was able to recover so strongly in recent months, thanks to the OPEC + countries' agreements regarding the reduction in production. However, due to the crisis, many countries are looking for additional income sources. Therefore, some countries are not fully complying with the agreements made. As a result, more oil flows into the market, which also has a depressing effect on oil prices.  

March 9th, 2020: 30% Oil Price Crash 

Monday, March 9th, can go into the history books as "Black Monday" for the oil price. Negotiations between Saudi Arabia and Russia had come to nothing.  

The oil price was under pressure in previous months due to the spread of the coronavirus. The world economy was on the back burner, and as a result, the oil demand had declined considerably. By limiting oil production, the countries that are part of the oil cartel hoped to stabilize or increase the price themselves. Saudi Arabia, in particular, is strongly in favor of limiting oil production. 

Saudi Arabia was now trying to force Russia in another way to join the OPEC plan. The Saudi’s were going to increase production considerably and flood the market with oil. As a result, the price of a crude oil barrel had opened more than 30% lower, the lowest price since 2016. A low oil price is disastrous for most countries. Most OPEC countries are almost entirely dependent on oil revenues.  

America's shale farmers may be hit hardest. The shale revolution seems to be built more and more on quicksand, as costs remain high and the new resources that are found have a much shorter lifespan. Even with an oil price of around $60 a barrel, many of these producers were already struggling. The unrest surrounding the coronavirus also makes it difficult to raise external capital. With Saudi Arabia pushing the oil price further down, the situation seems to be untenable for many producers. Players with a fragile balance and relatively high costs are unlikely to make it. What Saudi Arabia failed to achieve in 2016 now seemed to have a good chance of success. 

April 21st, 2020: WTI Goes Below Zero 

In April 2020, we saw a situation in the oil markets that has never occurred before. The West Texas Intermediate Crude Oil (WTI) futures contract for May fell more than 100%. The price fell during the day and took an unprecedented dive later in the evening to $ -37.63/barrel, meaning that oil producers would indeed have to pay buyers to collect the oil. 

This is mainly because the storage capacity in Cushing, Oklahoma is full. And it is precisely there that this oil is delivered. Traders and large companies who were long yesterday but ran out of storage capacity or liquidity to purchase oil were forced to close futures before expiry.  

Shale Oil Influence 

Oil production increased rapidly, and OPEC was not happy about this. They saw the increase in supply in the Middle East as competition. OPEC, therefore, came up with the idea of ​​fully opening the oil taps. The production costs of shale oil were many times higher. The result was a drop in oil prices from about $110 a barrel to below $30 at the beginning of 2016. OPEC hoped to wipe out shale farmers in this way.  

This strategy failed, and the OPEC countries themselves ultimately suffered considerable disadvantages from this strategy. For years they saw their income more than halved. In the meantime, the shale farmers have learned to work cheaper and more efficiently, and they are already profitable at a lower oil price. What’s typical of this form of oil extraction is that production can be increased quickly. 

OPEC Influence 

Demand for oil will remain stable in the coming years. But it is also apparent that there is a lot of extra supply on the market now that American oil production is rapidly increasing. Shale oil, in particular, is extracted from the ground here. The shale revolution was set in motion in 2014 by the sharp rise in oil prices. This form of oil extraction was therefore profitable, despite the high production costs. Due to the attractive market, the oil companies sprang up like mushrooms. 

OPEC is trying to limit production to keep the oil price at a reasonable level. Most countries benefit from a somewhat higher, but in any case, stable, oil price. According to OPEC, the oil industry must invest more than $11,000 billion over the next 20 years. If producers don't do that, there will be a shortage. In principle, shale farmers have already invested enough in recent years to absorb a large part of these shortages.  

Furthermore, OPEC states that demand continues to increase despite the emergence of electric cars and the like. OPEC writes that the massive expansion of air travel creates a greater demand for oil than the emergence of alternative energy sources can diminish. 

Since the low oil price in 2016, OPEC has been trying to support the low oil price. This is done by agreeing on production restrictions with all countries that are members of OPEC. The agreements do not always go smoothly, as Iran and Iraq do not always adhere to these agreements. On the other hand, the US and other countries continue to produce more and more oil, putting oil prices under pressure for a long time. 

Factors That May Affect the Price of Crude Oil 

We know that oil is an indispensable raw material in the world and that it is used both as raw material and fuel to make plastics, pharmaceuticals, and many other products. Hence, the demand for oil remains strong, and these industries' health will determine most of the world's oil demand. If demand from these industries increases while production stagnates, it will lead to higher prices for this commodity. Of course, and vice versa, if these industries are in a recession, their oil demand will be lower, so demand will decline. If production remains stable or increases in this case, it will logically lead to a drop in the price of a crude oil barrel. 

As you will have understood, it is mainly by analyzing the difference between supply and demand that you will determine how the price or price of crude oil will evolve. 

It should also be noted that this analysis is slightly more complex today than it used to be. Until a few years ago, it was pretty easy to understand how these prices would behave. At the time, the US was the largest consumer of crude oil. On the other hand, OPEC was the main supplier to the market in terms of production. But over time and the years, this situation has become more complex and slightly more confusing. One explanation for this phenomenon is that oil drilling technologies have improved greatly and resulted in better supply. Besides, we have seen the emergence of alternative solutions for this production. Finally, new players have also joined, including China, a major oil consumer in the world. 

Below we have listed factors that change the supply or demand for oil and thus contribute to the evolution of this commodity's price and price. 

1. Production data in barrels per day from OPEC countries

Too much production generally leads to lower oil prices per barrel and vice versa. US crude oil inventory data is published weekly, which also affects WTI.  

2. Supply, which is published weekly on the economic calendar.

Big supply also contributes to falling prices, while little supply leads to higher prices.

3. The international geopolitical situation

Conflicts affecting the oil-producing and exporting countries often influence the development of the price per barrel.

4. The value of the US dollar on the currency market

As a barrel of oil is denominated in dollars, this currency will be weaker, and more oil purchases will be stimulated by holders of other currencies. 

Final words 

Make sure to create a free demo account on! is a useful platform for both novice and expert traders. You will be up to date on interesting updates about crude oil as an investment asset, and the user-friendly interface will come in handy if you decide to trade crude oil or any other commodity. 
If you look at the price changes of oil for a while now, you will start to see a pattern, and as an investor, you can respond smartly to this.  
If you want to invest in oil, it is a good investment to get in when the oil price is at a certain bottom. Of course, there is no guarantee that oil prices will ever rise as much as in the past. Oil is a limited resource and is probably the most precious material in the world. Investing in commodities is one way to improve your overall investment portfolio.  

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Cristian Cochintu
Cristian Cochintu

Cristian Cochintu writes about trading and investing for Cristian has more than 15 years of brokerage, freelance, and in-house experience writing for financial institutions and coaching financial writers.