Crude oil prices are expected to remain low in early 2024 due to lower demand and higher oil output, Money Control reported while quoting energy experts.

“Factors such as demand concerns and several countries increasing their crude output would weigh on prices,” said Saumil Gandhi, senior analyst of commodities at HDFC Securities.

According to Gandhi, crude oil supply was more than demand. “For the first half of 2024, we expect Brent (crude) to range between $60-65 per barrel (lower band) and $85-90 per barrel (upper band).”

The news outlet added that the fuel demand from China, one of the biggest economies in the world, has not recovered. Moreover, the lower crude prices in the last two months of the previous year were because of a weaker global economy and rising crude inventories in the US.

In December, the Organization of Petroleum Exporting Countries and their allies (OPEC+) agreed to cut output by nearly one million barrels per day (bpd) by early 2024. Such a decision led to a total cut in production above 2.2 million bpd, or about 2% of the world supply.

Apart from Saudi Arabia and Russia, many countries have increased their output. Experts were of the view that only geopolitical tensions in the Middle East could fuel the oil prices up.

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“Expansion of war could support prices, but otherwise crude is expected to remain between $75-80 per barrel over the next three months,” said Prashant Vasisht, the VP and co-head of corporate ratings at the ICRA.

Oil prices jumped in the first session of the New Year, boosted by the chances of Middle East supply disruptions after a naval clash in the Red Sea, as well as hopes of strong holiday demand and an economic stimulus in China, the top importer of crude.

Brent crude rose $1.28, or 1.7%, to $78.32 a barrel by 0438 GMT while US West Texas Intermediate crude was at $72.69 a barrel, up $1.04, or 1.5%.