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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Oil Prices Set for First Annual Decline Since 2020

  • On Friday, the last trading day of 2023, oil prices were trading slightly higher and on track to post a 10% drop for the year.
  • Oil prices have now lost around 20% since their highest level for 2023 of above $90 per barrel.
  • Overall, the OPEC+ group’s efforts to prop up prices have failed this year.

Concerns about economies and oil demand amid rising interest rates have pushed oil prices down to a 10% decline this year, the first annual drop since 2020, despite the OPEC+ production cuts and a new war breaking out in the Middle East.   

On Friday, the last trading day of 2023, oil prices were trading slightly higher and on track to post a 10% drop for the year compared to 2022. The U.S. benchmark, WTI Crude, was trading up by 0.33% at $72.01, and the international benchmark, Brent Crude, was set to end the year below the $80 a barrel mark, as it traded at $77.51, up by 0.47% on the day.

Oil prices have now lost around 20% since their highest level for 2023 of above $90 per barrel reached at the end of September.  

Oil saw heightened volatility this year again, as concerns about demand pulled prices lower while the OPEC+ cuts and the extra Saudi cuts offset—but only to an extent—the drop in prices.   

Overall, the OPEC+ group’s efforts to prop up prices have failed this year, as non-OPEC oil supply – led by the United States – grew faster than previously expected. The higher non-OPEC+ production, courtesy also of Brazil, Canada, and Norway, among others, prompted analysts to revise down their expectations of a market deficit at the end of this year and early next year.

China’s economy was also a major concern for oil market participants, with a mixed bag of monthly reports about manufacturing activity and crude oil imports. The rising interest rates in the United States also weighed on the market, which feared a recession would follow the rate hikes and depress oil demand.

The Hamas-Israel conflict, which added to the Russian war in Ukraine to increase geopolitical risks, hasn’t pushed up oil prices this year, either.

Although the Fed has signaled that there could be three rate cuts in 2024 that could boost economic growth and oil demand, analysts expect continued volatility next year, stemming from geopolitical flare-ups.    

By Tsvetana Paraskova for Oilprice.com

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  • William Oil Investor on December 29 2023 said:
    Kick that can, but did you kick it far enough? They won the 2023 battle on the artificial price of oil, after a year of ridiculous volatility, full of media and govt lies, all to ensure oil is no longer profitable for most including Russia etc, aside from a select chosen few like Warren, since they cannot sell people on the green agenda and EV, most are losing tremendous amounts and few profitable, and sanctions ineffectiveness and blow back. Lets assume no more interest rate hikes, as California is about to roll out $20 wage for restaurants and others; we are still paying for the $15 min wage bump started in California first. Thus far, the feds have seem to buy into the oil market rouse, staying off another increase, but lets see if that lasts or holds, or we get both, rise in price of oil and another interest rate increase, as they are attempting the opposite for election, economic, sanctions, war, control, and many other agenda driven factors and reasons. 2024 another roller coaster year of volatility ahead!

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