Oil Prices Will Remain Volatile

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Oil Prices Will Remain Volatile

According To Bofa, Oil Prices Will Remain Volatile

The analysts of Bank of America (BofA) have recently shared their overview of the oil market during 2024. According to them, the next 12 months (2024) will be very volatile as the oil is expected to face numerous challenges.

As per the forecast, Brent crude oil prices will trade at an average rate of $80 in 2024. The Brent prices could go higher or lower, but the average value will stay close to $80.

Last year (2023), a -10 % change occurred in the crude futures amid oil cuts, geopolitical tension, and depressed global demand.

For the year 2024, traders shouldn't expect a calm oil market. The challenges are still the same & and may even become worse during the next 12 months.

6% Supply Cuts In Effect

Right now, the OPEC+ announcements suggest that some six million barrels' worth of supply cuts are in effect. In percentage terms of global supply, that accounts for almost 6%.

This year, the BofA believes that the oil market should pay close attention to Saudi Arabia's oil-related actions. Against this backdrop, the trading range for Brent crude will be from $70 to $90 as the demand outlook is still uncertain.

The BofA also added that the overall valuations for the oil market could be better! Given the strong growth in the oil market during the last three years, that's a significant change for 2024.

Another fact highlighted by the BofA is that some big deals are being made in the shale fields of the USA. That would be a significant development if it goes through, but we should also know these things take time.

As for the best oil stocks for the year 2024, BofA analysts highlighted Chevron, Exxon Mobil, and the OXY (Occidental Petroleum).

We also need to consider that oil-producing countries can only deepen the supply cuts to a certain extent. After all, producing less oil means they earn less money by selling the oil products.

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