MacroVoices #412 Dr. Anas Alhajji: 2024 Petroleum Outlook Update
Jan 25, 2024
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Oil market expert Dr. Anas Alhajji provides a fresh crude oil outlook for 2024, discussing crude oil prices, the oil market outlook, geopolitical premiums, conflicts in the Red Sea, rerouting of oil shipments, surprises in oil production, the necessity of petroleum, analyzing crude oil inventories in the US, and analysis of gold, uranium, and two-year T-Note futures.
Crude oil prices in 2024 expected to stay steady, but a global energy crisis is predicted in the late 2020s.
Imbalanced growth in global oil demand with China, India, and Latin America recovering while other regions struggle.
Crude oil prices to remain range-bound in 2024, influenced by Saudi Arabia-Russia coordination and consumer reaction to high prices.
Deep dives
Crude oil prices to hold steady in 2024, global energy crisis expected in late 2020s
Barring a geopolitical escalation, crude oil prices are expected to remain steady in 2024, according to Dr. Anas Alhaji, a prominent economist. However, he predicts a global energy crisis in the late 2020s, driving prices much higher. The Red Sea has become a crucial area due to Russian oil exports and traffic from Gulf states and China. Egypt's economy is at risk if the Suez Canal faces disruptions. Meanwhile, the geopolitical tensions and conflicts in the region pose stability risks. Anas expects oil prices to stay within a range, with potential fluctuations due to geopolitical events.
Outlook for 2024: Two worlds with imbalanced demand growth
The outlook for 2024 shows imbalanced growth in global oil demand, with China, India, and Latin America experiencing recovery, while other regions struggle. Anas highlights that the growth in EV production and the subsequent demand for petrochemicals are significant factors to watch. The rise in electric vehicle sales in China has led to increased demand for products derived from oil, countering the expected reduction in gasoline consumption. However, Anas also emphasizes the potential for an energy crisis in the late 2020s due to a combination of decreased investment in the sector and unmet demand from failed green policies.
Market analysis: Crude oil prices potentially range-bound in 2024
Crude oil prices are anticipated to remain in a range-bound state in 2024, with the possibility of short-term breakouts in response to geopolitical events or economic factors. Anas suggests that the coordination between Saudi Arabia and Russia will play a role in determining price levels, with the Saudis favoring higher prices, while Russia aims for lower prices to compete with US LNG. Additionally, Anas notes the significance of consumer reaction to high oil prices, which may result in a reduction in demand by 1 to 2 million barrels. The overall conclusion is that the market is expected to experience stability in 2024, barring any major disruptions.
Gold and Uranium: Potential for recovery and dip-buying opportunities
Gold, while trading near the 100-day moving average, remains in a consolidation phase, with potential for a breakout higher or prolonged trade range. Anas views this as a dip-buying opportunity and expects a rally later in the year. On the other hand, Uranium has seen a significant run-up, and despite expectations for a potential correction, it also presents a buying opportunity for investors, especially considering the upward trend in the long-term outlook for Uranium.
US dollar index resilience and potential rally in first quarter
The US dollar index has held its ground around the 103 level, with potential for a rally in the first quarter of 2024. While watching for the impact of FOMC announcements and rate decisions, Anas anticipates various scenarios based on economic data and central bank actions. A sustained move above certain resistance levels could indicate a dollar rally, while a break below key support may suggest a reversal.
MacroVoices Erik Townsend & Patrick Ceresna welcome back Dr. Anas Alhajji, for a fresh crude oil outlook for 2024. Erik & Anas will discuss, crude oil prices, the oil market outlook, geopolitical premiums and much more. https://bit.ly/3Ogl3gT
