At its last meeting, OPEC agreed to extend oil production cuts until 2025, a year longer than previously planned. Despite this seemingly optimistic news, prices have been falling since the beginning of the week, despite the growing geopolitical pressures around the world.
What was the main reason for the decline in oil?
*Chinese demand
Another factor affecting oil prices is the unexpected contraction in Chinese manufacturing activity, which cast a shadow over China's inability to achieve the 5% growth target for this year, especially with the ongoing trade wars with the United States and Europe.
In the worst-case scenario, Beijing could intervene by pumping money into the financial system to maintain growth.
On the other hand, analysts have lowered their oil price forecasts for 2024, reflecting reduced supply risks and market balance, according to the survey, the average price of Brent crude in 2024 is expected to be about 84.00 dollars per barrel, and US crude oil 79.50 dollars per barrel, both lower than the April forecast.
In addition, Saudi Arabia's move to sell Saudi Aramco shares highlights the uncertain market outlook. With Brent crude oil breaking the levels of 80 dollars per barrel in the current period, it is likely that Saudi Arabia will strive to steer prices upwards, it wants prices ranging from 100 to 110 dollars per barrel.
However, if demand disappoints again, prices may fall further.
