Anas Al-Hajji, editorial advisor for the specialized energy platform, energy economics expert, said that oil prices may rise to the $100 barrier, but this will only happen in one case.
Al-Hajji explained, in an episode of his program, “Energy humanitiesHe presented it in the Twitter spaces, entitled “A preliminary look at the oil markets in 2024,” that since last December (2022), it was indicated that some OPEC + countries will import oil and oil products from Russia, but the expectations were in small quantities.
He added, “But we were surprised that these quantities have become large, and then affect the markets during the current year (2023) and next year (2024), and based on these changes, the opportunity for oil prices to reach $100, without a major global political crisis, does not exist now.”
Will oil prices rise?
Anas Al-Hajji, editorial advisor for the specialized energy platform, said that the possibilities of oil prices rising above $100 previously existed at the beginning of the year, but now this is no longer possible with new developments, especially the building of Chinese stocks, regardless of the status of Beijing’s economy or other economies.
He pointed out that China will use the strategic stockpile, and will use the commercial stockpile, to prevent oil prices from rising, so the expectation that it would rise is correct, yes it will rise, and there was a possibility of reaching $100 a barrel or more.
And Dr. Anas Al-Hajji continued: “The possibility was already present, but now reaching $100 a barrel is over and non-existent, especially since the basic assumption here is that there will be a major political incident.”
He explained that given the current market situation, Saudi Arabia announced additional voluntary cuts, and these cuts affected the markets in terms of not lowering oil prices, although some of them always focus on the idea that the reduction will not raise prices.
He added, “Imagine the market situation without this reduction. Prices would have fallen to several dollars lower than the current levels, and then the Saudi reduction contributed to setting a price floor, as – as we mentioned previously – Saudi Arabia will set the price floor, and China will set its ceiling by using its strategic stocks.”
Oil demand in 2024
Energy economist Dr. Anas Al-Hajji said that when talking about the oil markets during the next year 2024, especially at a time such as the middle of the current year 2023, we look at all the expectations, to find that there is a big difference between them.
However, according to Al-Hajji, with the passage of time and the availability of more information, there will be a great convergence between these expectations, as it is normal now that there are large differences, but by next March, we will find that there is a kind of agreement between these expectations for the year 2024.
He added, “When we talk about expectations, we often talk about the expectations of the International Energy Agency, OPEC, the US Energy Information Administration, and some companies and banks, but for reasons of time, I will focus on the International Energy Agency and OPEC, and of course through them I will talk about our expectations for the year 2024.”
The following argument, prepared by the specialized energy platform, shows the expectations of global oil demand during 2024, from OPEC, the International Energy Agency and the US Energy Information Administration:
And Dr. Anas Al-Hajji continued: “The first result is that looking at the expectations of the International Energy Agency and OPEC, we find that they are completely contradictory, and each team is on one side. OPEC is on the far right, and the International Energy Agency is on the far left, especially with regard to growth expectations for global demand for oil.” “.
He pointed out that there is still a problem with OPEC’s expectations, because it is very optimistic, and it is assumed – according to these expectations – that Saudi Arabia, the UAE and Algeria will not cut production voluntarily, yet they announced a reduction in production, and oil prices did not rise.
He explained that the global demand for oil under any scenario, even if there is an economic recession during the current year 2023, the year 2024 will witness the global demand for oil reaching its highest level in history, meaning that this scenario is very important, because some of them are talking about the demand reaching its peak in 2018.
And he added, “In 2020, we found major companies and large scientific institutions saying that the demand for oil reached its peak in 2019. Of course – as I said previously – this talk is incorrect, and there are many indications of that, as some of them have a plan, and others do not, but There is a shortcoming in the study of the demand for oil.
The following chart, prepared by the specialist energy platform, shows global oil demand levels according to OPEC, from 2019 to 2023:
Anas Al-Hajji indicated that the increase in oil demand reached its highest level in 2024, confirming the failure of all these expectations, and that there are either certain plans, or problems in understanding the demand for oil, and the strange thing is that before Corona in 2019, there were expectations that demand would grow. On oil, it will reach 105 million barrels in 2030.
The surprise here, according to al-Hajji, is that the demand for oil will reach 105 million barrels in 2024, as all talk about climate change, climate change policies and electric cars does not have strong effects in real life.
Al-Hajji said that there is a crisis represented in the lack of sufficient investments, and a war against oil. The strangest thing is that there are citizens of the Gulf countries and Arabs in Europe who are fighting oil fiercely, and they talk about the end of oil and the destruction of the Gulf economy.
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