What's New

The Brent crude oil benchmark is set to exceed $80 per barrel by the end of this year, according to a new Bloomberg Intelligence oil price survey.

The survey showed that the majority of respondents—53%--see Brent crude oil prices above $80 per barrel at the end of 2024. A much smaller percentage—5%--see crude oil prices exceeding $100 per barrel.

The new Bloomberg Intelligence survey also showed that nearly a quarter of respondents see peak oil demand to hit prior to 2030—that's down from 50% of those surveyed in 2022 who saw peak demand by that time.

As for geopolitical risk, the overwhelming majority of respondents—92%—say that the geopolitical risk premium already baked into crude oil prices is less than $5 per barrel. So even with Russia invading Ukraine, Houthi rebels attacking vessels in the Red Sea, causing oil tankers to take the long way around, and tensions between the United States and Iran continue to fester, oil prices are not too far off the mark from where they would be without all that tension.

"The turmoil in the Red Sea and the Israel-Hamas conflict has arguably had a limited effect on prices, given there hasn't been any substantial disruption to oil flows, and OPEC+ has a meaningful amount of spare capacity. However, the Middle East tensions and the geopolitical risk premium may be slowly starting to become more baked into oil prices. That's after they were outweighed by weak economic prospects and a bleak demand picture in the past few months, as Brent oil price tests $85 a barrel," Salih Yilmaz, Senior Industry Analyst for Bloomberg Intelligence, said.

While survey respondents largely agreed that the geopolitical premium for crude oil was small and peak oil wouldn't happen before 2030, few agreed on what will drive oil prices over the next few years. 27% of respondents said OPEC+ will be the driving force. 27% said China's demand. 22% said non-OPEC+ supply growth, and just 14% named Fed policy and interest rates.

By Julianne Geiger for Oilprice.com