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Editor in Chief Mohamed Wadie

Oil Prices End 2023 with 10% Decline


Fri 29 Dec 2023 | 11:41 PM
Taarek Refaat

Oil prices are set to end 2023 down about 10%, the first annual decline in two years, after geopolitical risks, production cuts and global measures to curb inflation caused sharp price swings.

Brent crude futures rose 33 cents, or 0.4% to $77.48 per barrel, the last trading day in 2023, while West Texas Intermediate (WTI) futures were trading up 20 cents, or 0.3% at $71.97.

Oil prices stabilized on Friday after falling 3% the previous day as more shipping companies prepared to cross the Red Sea route. Major companies stopped using the Red Sea routes after the Yemeni Houthi group began targeting ships.

However, both benchmarks are on track to close at their lowest year-end levels since 2020, when the pandemic hurt demand and sent prices lower.

Production cuts by OPEC+ have proven insufficient to support prices, with benchmark crudes down nearly 20% from their highest level this year.

Oil's weak year-end performance contrasts with global stocks, which are on track to end 2023 on the rise.

The MSCI stock index, which tracks stocks in 47 countries, has risen about 20% since the beginning of the year, as investors ramp up bets on rapid interest rate cuts from the US Federal Reserve next year.

In the currency market, the dollar declined and headed down by 2% this year after two years of strong gains.

Industry officials say expected cuts in interest rates, which could reduce consumer borrowing costs in key consuming regions, and a weak dollar, which makes oil less expensive for foreign buyers, could boost demand in 2024.

A Reuters survey of the opinions of 30 economists and analysts expects the average price of Brent crude to reach $84.43 per barrel in 2024, compared to an average of about $80 per barrel this year and its highest levels above $100 in 2022 after the Russian invasion of Ukraine.