Oil prices are projected to increase this year, with the Brent crude price averaging $84 per barrel in 2024, up from $83 per barrel last year, the April 2024 World Bank Commodity Markets Outlook.

This reflects the recent ratcheting up of geopolitical tensions and a tight supply-demand balance.

According to the World Bank, this forecast assumes no further conflict escalation and thus anticipates that the average oil price for the remainder of 2024 will edge down from early April [2024] levels, as the recent risk premium increase abates.

It explained that oil prices are expected to trend somewhat lower next year, averaging $79 per barrel as supply conditions improve.

The report continued that oil production is expected to expand 0.8 mb/d this year, due mainly to increasing supply from the United States, while OPEC+ production is set to decrease.

“Consumption is foreseen increasing about 1.2 mb/d this year—a notable deceleration from 2023—with all the net demand growth in emerging market and developing economies (EMDEs). Next year, oil demand growth is anticipated to slow further, with a contemporaneous reversal of OPEC+ supply reductions pushing production higher, resulting in building inventories”, it pointed out.

Presently, Brent crude is going for $89.23 per barrel on the international market.