Brent Crude Oil Prices Rangebound During 2024: EIA

Benchmark Brent crude oil futures prices averaged $80 per barrel (b) during 2024, down $2/b compared to 2023, according to an Jan. 6 report published by the U.S. Energy Information Administration. Despite the geopolitical uncertainty and risks evident in the global energy market, Brent crude oil prices traded in their narrowest range since 2019, with prices trading in a range of $24/b between $68/b and $93/b.

Prices traded within a narrow range based on a number of supply and demand fundamentals. Robust global growth in oil production and dampened demand growth led to weaker prices, whilst voluntary supply reductions among OPEC+ members and heightened geopolitical risks provided prices with underlying support.

During the first three months of 2024, Brent oil prices increased, in line with heightened geopolitical risks, particularly in the Middle East. The conflict in the Middle East increases the probability that there could be oil supply disruptions, and as a result Brent crude futures contracts price in this supply risk premium into their valuation. During the start of 2024, Houthi militia attacked vessels entering the Red-Sea, as a result trade disruptions became evident, as ships rerouted to avoid the region. Ships that did not pass through the Suez Canal via the Bab el-Mandeb Strait and Red Sea went around southern Africa via the Cape of Good Hope, this increased voyage time, as well as costs and led to tightening supply fundamentals across the oil markets.

Front month Brent crude contracts traded at their highest-level during April 2024, settling at $91/b. Thereafter, prices largely followed a downward trend for the remainder of 2024, with marginal price corrections driven by OPEC+ announcements in June and September, with regards to delayed production increases.

Brent crude oil prices generally declined, following a brief upward trend, particularly during the second half of 2024, amid economic weakness and oil consumption concerns in China. The agency estimates that global oil usage increased by less than 1 million barrels per day (b/d) during 2024, less than the yearly average growth in the decade before the pandemic of 1.5 million b/d. Brent crude oil prices reached their lowest level of $69/b during September.