Skip to content Skip to Search
Skip navigation

Crude market expected to recover after steep dive

While crude may recover to $85 per barrel, Saudi Arabia needs it to be at $96 per barrel to cover budgeted spending, according to the IMF Alamy via Reuters
While crude may recover to $85 per barrel, Saudi Arabia needs it to be at $96 per barrel to cover budgeted spending, according to the IMF
  • Brent expected to return to $85
  • Opec+ ready to support prices
  • Interest rate cuts build optimism

Leading analysts are anticipating a recovery in the crude market after prices tumbled following a decision by Opec+ to unwind voluntary output cuts, deepening a downward trend over the last two months. 

Two reports published this week forecast Brent’s return to levels around $85-$86 per barrel in the coming weeks and for the rest of the year.

Brent flirted with $80 per barrel on Friday after a steep dive from $85 to nearly $76 per barrel in a week. The market has been reassured by Opec+ members’ readiness to do more to support prices if needed.



Prince Abdulaziz bin Salman, the Saudi energy minister, reiterated on Thursday that last weekend’s Opec agreement retains the option to pause or reverse production changes if necessary.

Saudi Arabia needs oil prices to be at $96/barrel, according to the International Monetary Fund, to cover budgeted spending. 

The European Central Bank’s decision to cut interest rates on Thursday has spurred hopes that the US Fed will follow suit and catalyse growth, which supports oil demand.

Analysts at BMI, formerly Fitch, expect the Fed to cut the primary interest rate to 4.75 percent from 5.5 percent currently by the end of the year, which will pressure the dollar to the downside.

BMI said that the US dollar could provide support to Brent.

“The ongoing US presidential race, elevated geopolitical risk and more challenging conditions for risky assets in the second half of the year could push the greenback to the upside, lifting oil,” BMI said.

BMI expects oil demand to increase at 1.9 million barrels per day in 2024 driven primarily by China and India.

Kpler, an analytics and data tracking company, also expects the market to tighten significantly in the coming weeks, leading to higher prices over the summer – although it said physical trading remained relatively weak due to high oil inventories, particularly in Europe and China.

“We believe that tighter balances will drive price recovery for Brent towards the mid-80s,” Kpler said in a note.

“The level of bearishness due to the latest Opec+ meeting may be overstated.”

Kpler said that crude and condensate balances indicate an average deficit of 2.6 million barrels per day between June and September due to increased demand for petroleum products, especially gasoline.

Higher domestic consumption across Opec+ members will also limit available volumes of crude for export, Kpler said. 

Latest articles

Shoppers choose vegetables in Istanbul; inflation means people are spending on essentials

Turkish retailers’ confidence wavers as inflation bites

Confidence is falling among Turkish retailers, according to a survey from the country’s statistics agency Turkstat. Shoppers have been scaling back on big-ticket purchases, spending instead on basic consumer goods as inflation piles pressure on household incomes. May’s business confidence report, released by Turkstat on June 24, showed sentiment in the retail sector at its […]

Water is handed out to pilgrims in Mecca. Hundreds of pilgrims without a Hajj permit died during extreme heat last week

Egypt shuts down 16 travel companies after Hajj tragedy

Egypt has withdrawn the operating licences of 16 travel companies for organising unlicensed Hajj trips to Saudi Arabia. A statement from the Egyptian government said the companies would be prosecuted and fined, with the funds used to compensate pilgrims’ families for their loss.  Hundreds of Egyptians were among 1,301 people who died of exposure to […]

A floating production unit in Israel's Karish gas field in the eastern Mediterranean. Carlyle is creating a new oil and gas company to manage the field

New Carlyle entity to manage East Med gas projects

Carlyle, the Nasdaq-listed private equity company, is creating a new oil and gas company to manage recently-acquired assets in the Mediterranean hydrocarbons market. The new as yet un-named entity will be led by former BP CEO Tony Hayward and will manage a portfolio of gas-weighted exploration and production assets in Italy, Egypt and Croatia, according […]

Spinneys plans to open another 12 stores in Saudi Arabia by 2028

Spinneys opens first Saudi supermarket in Riyadh

Spinneys has opened its first supermarket in Saudi Arabia and is planning a further 12 stores in the country by 2028. The UAE supermarket operator listed on the Dubai Financial Market last month and raised AED1.38 billion ($375.7 million) from its initial public offering, which was oversubscribed almost 64 times. The first Spinneys in Saudi […]