Brent oil is expected to stay above $80 a barrel at the end of 2024, the price Opec+ seems to be targeting as a floor, according to the majority (53 per cent) of respondents to Bloomberg Intelligence's February oil-price survey, with only 5 per cent seeing prices surpassing $100.

Just a quarter (24 per cent) of respondents expect peak oil demand before 2030 - compared with almost 50 per cent in BI’s 2022 oil survey - as sentiment shifts around the resilience of demand and the outlook for continued consumption growth.

In addition, a significant majority of respondents (92 per cent) said there is a less than a $5-a-barrel geopolitical risk premium attached to oil prices by the market currently, despite several high-profile disputes and tensions.

Salih Yilmaz, Senior Industry Analyst - Energy at Bloomberg Intelligence, said: "The turmoil in the Red Sea and the Israel-Hamas conflict has arguably had a limited effect on prices, given there hasn't been any substantial disruption to oil flows, and Opec+ has a meaningful amount of spare capacity. However, the Middle East tensions and the geopolitical risk premium may be slowly starting to become more baked into oil prices. That's after they were outweighed by weak economic prospects and a bleak demand picture in the past few months, as Brent oil price tests $85 a barrel."

DIVERSE OPINIONS

BI’s survey shows that there is a wide disparity of opinion around what the biggest driver will be for oil prices over the next two years. Over a quarter of respondents (27 per cent) said it will be Opec+ policy, while another 27 per cent said it'll be the China demand story. Some 22 per cent believe it will be the non-Opec+ supply growth, and another 14 per cent think it'll be the Fed policy and interest rate outlook.

Yilmaz added: "According to our findings, geopolitical developments have been one of the key drivers of crude in the past few months though only 10 per cent of the respondents think this will be the biggest driver of oil prices over the next two years."

More than half (55 per cent) of those polled think the Opec+ alliance will still be in place in 2025, as its intervention in the market during the pandemic was deemed successful overall, notes BI. This compares with 76 per cent in its 2023 survey, however, showing confidence in the group's unity has fallen as there's still some tension among some members amid the continued need for the output cuts

Yilmaz added: "The addition to Opec of Russia and other oil-producing states has created a larger bloc, enabling more output to be monitored and managed. The group's agility has helped it become effective in responding to market moves. With a monitoring committee overseeing Output More Closely, OPEC+ Is Also Arguably Better Positioned To Manage The Supply-Demand balance."

BI’s latest survey has shown a shift in sentiment over the resilience of demand and the outlook for continued consumption growth, with only 24 per cent of the respondents expecting peak oil demand before 2030 - compared with almost 50 per cent in the 2022 survey. More than a third (69 per cent) see demand for crude peaking by 2035 vs. more than 80 per cent of respondents in the 2022 poll.

Global demand is forecast to be between 102-103 million barrels a day (mmbpd) on average in 2024 (vs. 101.8 mmbpd in 2023), according to 51 per cent of respondents, while only 18 per cent see it above 103 mmbpd.

Yilmaz concluded: "Global demand growth was underwhelming last year, driven by a softening outlook in China amid rising unemployment and turmoil in its property sector. Even so, demand is still expected to reach another record this year, helped by further recovery in jet-fuel consumption - about 8 per cent of the pre-pandemic total."