Crude Oil: Supply, Fed, Ukraine Offensive to Fuel Rally Above $90?

investing.com:

Over the first quarter of 2024, WTI crude oil is expected to rise by at least 15%. This uptick marks the end of a downward trend observed in the third and fourth quarters of 2023, which was part of a broader trend that began in mid-2022.

Geopolitical tensions in Ukraine and the Middle East, along with a potential Chinese economic recovery and OPEC+'s continued supply-reduction policy, have fueled demand in recent weeks.

Buyers are currently eyeing maximum price levels around $94 per barrel, where long-term peaks were seen last September.

Recent days have seen a Ukrainian offensive targeting Russian oil infrastructure using drones, particularly in Rizan, Kshtsovo, and Kirsakh, where Rosneft-owned refineries are located.

Despite Russian crude being under sanctions, these attacks have caused supply constraints, increasing global prices due to heightened risk.

The ongoing conflict in the Middle East, with no end in sight, also contributes to sustained demand pressure.

Additionally, disruptions to shipping in the Red Sea basin from continued attacks by Yemeni Huti militants have forced vessels to take longer routes to European ports around Africa, further driving up prices.

The latest International Energy Agency report, published last week, revised global demand forecasts for 2024 upward by 110,000 barrels per day to 1.3 million barrels.

This is primarily due to the expected sustained economic recovery in China, supported by stimulus packages, and solid economic growth in the US.

OPEC+'s decisions, representing over 40% of global production, also influence oil prices significantly.

It is expected that the production cuts announced last year will continue in the coming months. Additionally, Iraq, along with Saudi Arabia, a