Oil stabilizes at around $67 per barrel: volatility looms on the horizon, analysts say

Pepperstone, an expert broker in international financial markets, today shared an in-depth analysis of the latest movements in the international oil markets and short-term scenarios.

“The crude oil price has shown some stability over the past two days, with crude trading near a multi-month low following OPEC's downward revision of demand forecasts for 2024 and 2025. Trading is centered around $67 per barrel, a level that has limited declines since September and reflects uncertainty about the global crude market outlook.

OPEC's revision, primarily affected by the demand from major consumers like China, has added additional pressure on crude prices. Economic growth concerns, particularly in Asia, are compounded by a strong U.S. dollar, creating a relatively unfavorable environment for the energy sector.

Additionally, geopolitical uncertainty may also play a crucial role in the coming months. Iran's willingness to maintain its crude production and export despite potential U.S. restrictions could increase market uncertainty, generating upward pressure if tensions escalate. Meanwhile, the market remains attentive to the upcoming demand estimates from the International Energy Agency (IEA), which could impact crude prices.

In the Latin American context, crude price volatility has varied implications. In Mexico, lower prices could affect government revenues and reduce investment in the energy sector, although the country's diversified economy could mitigate these effects. In Colombia, the drop in oil prices might place pressure on the Colombian peso, while Chile, as a net energy importer, could benefit from lower costs, though risks remain if weaker global demand impacts copper exports.

In conclusion, the crude market outlook remains relatively uncertain, with numerous factors playing a decisive role in the future direction of prices. From OPEC's demand revision to expectations around the IEA report and geopolitical tensions, the market is in a fragile situation that could lead to significant movements in the near future.

Analysis by Quasar Elizundia, Expert Research Strategist - Pepperstone