Crude oil prices have shown signs of stabilisation over the past two days, hovering near multi-month lows following OPEC’s downward revision of demand forecasts for 2024 and 2025.
The market is currently centred around US$67 per barrel, a level that has acted as a support since September, reflecting the ongoing uncertainty surrounding the global crude market outlook.
OPEC‘s recent revision, primarily influenced by demand projections from major consumers like China, has added further pressure on crude prices.
Economic growth concerns, particularly in Asia, coupled with a strong U.S. dollar, have created a challenging environment for the energy sector.
Geopolitical factors are expected to play a crucial role in the coming months.
Iran’s commitment to maintaining its crude production and export despite potential U.S. restrictions could introduce additional market uncertainty, potentially generating upward pressure if tensions escalate.
Meanwhile, market participants are closely monitoring the upcoming demand estimates from the International Energy Agency (IEA), which could significantly impact crude prices.
The implications of crude price volatility vary across Latin American countries.
In Mexico, lower prices could potentially affect government revenues and reduce investment in the energy sector, although the country’s diversified economy may help mitigate these effects.
Colombia might face pressure on its peso due to the drop in oil prices, while Chile, as a net energy importer, could benefit from lower costs.
However, risks remain if weaker global demand impacts Chile’s copper exports.
The crude market outlook remains uncertain, with multiple factors poised to influence the future direction of prices.
From OPEC’s demand revision to expectations surrounding the IEA report and ongoing geopolitical tensions, the market finds itself in a delicate situation that could lead to significant movements in the near future.
Quasar Elizundia, Expert Research Strategist at Pepperstone, emphasises the fragility of the current market situation, noting that the convergence of these factors could potentially trigger substantial price movements in the coming weeks.
