ICE Brent crude oil prices have been hovering around $80 to $90 per barrel since early February, supported by OPEC+ crude oil production cuts and conflicts in the Middle East. However, at the beginning of June, prices fell back below $80 per barrel after an OPEC+ policy change. On June 2nd, the OPEC+ group decided to increase oil production by a total of 2.2 million barrels per day (0.18 million barrels per day per month from October to December 2024 and 0.213 million barrels per day per month from January – September 2025) which is the main supply pressure on prices. PTT Trading’s international market analysis team predicts that ICE Brent crude prices will range between $75 and $85 per barrel in Q3 2024.
Crude oil prices are being supported amidst Middle Eastern conflicts, with ICE Brent crude oil prices averaging $86 per barrel in April and May, up from $81.7 per barrel in Q1 2024. This increase is driven by geopolitical factors, including tensions that led to a missile strike between Iran and Israel, which was significant news worldwide in mid-April. This caused the price of ICE Brent crude oil to soar above $90 per barrel. However, after that, the situation did not escalate, and both sides decided to end their military responses, resulting in a sharp drop in the price of ICE Brent crude oil as it did not impact oil supply.
The Israel-Hamas war, which began on October 7, 2023, has resulted in around 37,000 deaths. On May 25, 2024, the International Court of Justice (ICJ) ordered Israel to cease military operations in Rafah for humanitarian aid, but Israel continued its efforts to rescue hostages and ensure civilian safety. Although the ICJ's rulings are final, they are often ignored due to a lack of enforcement mechanisms. The Israeli government confirmed that it will continue operations in Rafah to rescue hostages and secure civilians. Recently, four hostages have been taken. Meanwhile, ceasefire negotiations between Israel and Hamas have not progressed, despite efforts by the United States, Egypt, and Qatar to mediate.
In summary, crude oil prices in the second half of the year may rise above $85 per barrel if the world's main central banks turn to stimulate the economy by lowering interest rates. For example, if the U.S. Federal Reserve (Fed) cuts interest rates earlier than the market’s current expectation (currently an expected cut 1 time in December this year). As can be seen, on June 6th the European Central Bank lowered interest rates by 0.25% for the first time in five years, after inflation started moving closer to the 2% target.
Moreover, the U.S. hurricane season from June to November 2024 is a factor to watch. The National Weather Service (NOAA) predicts that this year's hurricane season will be stronger than normal, with an 85% chance of being above normal, a 10% chance of being near normal, and a 5% chance of being below normal. NOAA forecasts a more severe hurricane season than usual, predicting 17 to 25 storms with winds of 39 mph or higher, and 8 to 13 of these becoming hurricanes (74 mph or higher), potentially impacting U.S. oil supply, as the country is the world's largest crude oil producer.
