Oil Price 2024

Price Remains Steady

The oil price has been around the 70 to 80 USD mark for a while now. This rather healthy price will be agreeable to most producers around the world.

Oversupply Usually Lowers Oil Price

Because there is a current oversupply of oil, the price might have crept 10 dollars or so less, under normal conditions (whatever that is), were it not for continued conflicts. The ongoing war in Ukraine and the Houthi rebel attacks on shipping in the Red Sea have had a nervous but buoyant effect on oil markets.

More Exploration Required

The amount of exploration is currently worrying some in the industry. They feel that there isn't enough exploration going on right now to maintain the expected oil supply requirements of the future. Global oil consumption is going up and will continue to do so for many years. We will need more producing oil wells next year than we do this year, and more the year after that and so on.

It takes time to plan, drill, develop and complete oil wells. We need to be exploring now for the years to come.

Inflation

When the supply doesn't keep up with demand, the price goes up of course, but then countries like Saudi Arabia can turn up the taps and production levels increase. However, if even they can not or do not want to fully keep up with demand, then we have a problem and the price can go through the roof. People pay more to fill their cars, price of logistics effects the cost to deliver food and everything. Everything costs more.

About The Author
Richard Johnson
Chewells Contributor

Richard is one of our main oil industry contributors. He likes fast cars, motor boats and... »

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