By
Mabyanine Phiri
As we enter the last month of the first quarter of 2024, an in-depth examination of the fundamental aspects influencing crude oil prices reveals a notable trend – the market has been ensconced within a relatively narrow trading range, fluctuating between $75 and $85 per barrel since the commencement of the year. This stability in the price range can be attributed to various factors, among which the continuation of OPEC+ supply cuts stands out as a significant contributor, exerting downward pressure on prices and shaping market dynamics as we transition into the second quarter.
The collaborative efforts of the Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC+) in implementing production cuts have been a pivotal factor influencing the crude oil market. These concerted supply reduction measures, designed to balance the global oil market, are anticipated to persist well into the second quarter of 2024.
The ongoing commitment to limiting production acts as a suppressant on oil prices, preventing significant upward movements.This delicate equilibrium between global oil supply and demand remains a cornerstone of the current trading range. The gradual recovery of global economies from last year's contraction has led to increased demand for oil.
However, the careful management of supply by major oil-producing nations remains preventing any pronounced surges in prices. The result is a measured trading range, reflecting the synchronized efforts to maintain stability in the market.