Global crude oil prices in the second half of 2024 should be roughly similar to last year as oil supply will increase and geopolitical conflicts in the Middle East are expected to remain simmering, says Thai Oil Plc, the country's largest oil refinery by capacity.
Last year the average crude oil price was $82 per barrel and it is projected in a range from $80-90 this year, said the refiner.
Oil supply should not be affected by tension between Israel and Iran, which should ease with negotiations, said Torsang Chaipravat, vice-president for financial planning at Thai Oil.
New crude oil supply, amounting to 1.25 million barrels per day, is expected to be added to the global market from the US and Guyana, she said.
The oil pipeline in Canada should also debottleneck, enabling easier supply, said Ms Torsang.
She said she expects a glut of refined oil products in the second half of this year based on higher production capacity from new oil refineries in Nigeria, Saudi Arabia, Kuwait and Iraq.
In the last six months of this year, global oil demand will be driven by the use of gasoline and jet fuel for travel as the global economy is expected to recover, said Ms Torsang.
The company believes investment prospects are positive for the second half, following the decrease in interest rates in Europe.
"We expect global oil demand will exceed last year," she said.
In Thailand, diesel and gasoline consumption is expected to slightly increase this year by 0.4% to 69 million litres per day (MLD) and 3.7% to 32.5 MLD, respectively, according to Thai Oil estimates.
Jet fuel consumption is projected to significantly increase by 24% to 17 MLD.
Fuel oil demand is predicted to decrease by 1.7% to 5.4 MLD as its usage is being phased out by power plants to decrease power generation costs.
Thai Oil expects its Clean Fuel Project (CFP) to start commercial operation in early 2025. Under the CFP, the company wants to increase its oil refinery capacity to 400,000 barrels a day, up from 280,000 barrels, upgrading fuel oil to products with a higher value, including diesel and jet fuel.