Energy experts are forecasting an increase in Brent crude oil spot prices, predicting a rise from the current level of below $80 per barrel to an average of $85 per barrel for the remainder of 2024 and $89 per barrel in the first quarter of 2025.
This upward pressure on prices is primarily driven by falling global oil inventories, largely due to OPEC+ production cuts among other factors.
Currently, Brent crude is priced at $79.42 per barrel, and West Texas Intermediate (WTI) stands at $76.29 per barrel.
Experts suggest that, ideally, prices should stabilize between $70 and $80 per barrel.
Louis Namwanja, a commercial lawyer, believes that the market will gradually return to moderate inventory builds by mid-2025.
This shift is expected after the expiration of voluntary OPEC+ supply cuts in the fourth quarter of 2024, combined with forecasted production growth from countries outside of OPEC+, which may begin to surpass global oil demand growth.
“I think global oil inventories will increase by an average of 0.3 million barrels per day (b/d) in the second half of 2025, with global production of liquid fuels expected to rise by 2.1 million b/d in 2025 as the OPEC+ voluntary production cuts unwind throughout the year,” Namwanja said.
OPEC+ production is projected to increase by 0.7 million b/d, along with 1.4 million b/d of production growth from countries outside of OPEC+.
Namwanja also highlighted other factors contributing to potential price increases, including the ongoing Middle East conflict, high demand from China, and regional issues, which could lead to a stronger U.S. dollar against the local currencies.
However, it remains uncertain how these global price increases will impact local African markets.
