In 2023, international oil prices showed a wide oscillation trend before low and after high, with the annual average price of Brent oil price at USD 82.17/bbl, and the annual fluctuation range of USD 70-100/bbl. Looking ahead to 2024, interest rate cuts by U.S. and European central banks are expected to boost investor confidence in the financial and commodity markets, but the growth of the global real economy and oil demand is still sluggish; at the same time, the world is ushering in an election year, with the U.S., Russia, Ukraine, India, Venezuela, and many other governments facing a change of government, which will aggravate geo-fluctuations and supply uncertainty. This article analyzes the five core events affecting the global oil market in 2024, with a view to providing readers with more thinking and reference.
U.S. and European central banks to start the process of interest rate cuts
In 2024, inflation levels in major countries in Europe and the United States are expected to continue to fall slightly, the Federal Reserve's monetary policy or from tightening to neutral, may be as early as the second quarter to open the process of interest rate cuts, the European Central Bank may start cutting interest rates as early as the second half of 2024. The dot plot of the Fed's interest rate expectations shows that the median forecast for the federal funds rate in 2024 is 4.6%, about 75 basis points lower than the current level. The entry of central banks into the interest rate reduction cycle is expected to improve macro market sentiment, support commodity prices and, to some extent, is expected to boost consumption growth.
At the same time, despite the monetary policy in Europe and the United States tends to ease, but the global face of the structural and cyclical problems highlighted, the economic outlook for the post epidemic era is still facing a lot of uncertainty. The International Monetary Fund (IMF) expects that global economic growth may slow further from 3% in 2023 to 2.9%, with the U.S. economy growing at 1.5%, the eurozone at 1.2%, and the Chinese economy growing at 5.4%, which is much higher than the vast majority of the economies, but continues to slow compared to the past few years.
*** Translated with www.DeepL.com/Translator (free version) ***
