Barclays lowers 2024 Brent price forecasts on higher supply

Barclays lowered its Brent crude price forecast for 2024 by $8 to $85 per barrel due to higher supply, but said that oil currently seems undervalued.

The cut in forecasts is primarily due to "a higher starting point for inventories and a potentially longer path to OPEC spare capacity normalization,” Barclays explained in a note.

However, Barclays expects sequential demand growth to accelerate and non-OPEC+ supply growth to slow sharply in 2024.

Large inventory draws did not occur in Q4 2023, as demand slowed and supply came in stronger than expected, according to the bank.

Barclays also noted that the rising tensions in the Middle East have had no effect on supplies, and unplanned supply outages are at their lowest levels in several years.