Oil prices ended Friday's session, which marks the end of 2023 trading, recording the largest annual decline since 2020, by about 10 percent, with concerns related to the increase in market supply of non-OPEC production prevailing.
Nymex crude futures fell by about 0.17 percent, losing 12 cents, and reaching $71.65 per barrel upon settlement.
Standard Brent crude futures fell by about 11 cents, or 0.14 percent, to reach $77.04 per barrel at settlement, amid weak activity on the last trading day.
It is worth noting that the year 2023 witnessed sharp fluctuations in oil prices, due to the geopolitical tensions that characterized the year, and with developments related to production, both with regard to the decisions of OPEC and its allies, as well as with regard to production outside OPEC.
OPEC+ is currently reducing production by about 6 million barrels per day, which represents about 6 percent of global supplies.
Despite briefly rising above $90 a barrel in September, oil prices have largely traded in a range of about $80 a barrel this year, as U.S. production and weak global demand keep prices in check.
Consensus forecasts indicate that prices will remain in that region in 2024. Although downside risks remain limited, upside risks to oil prices could come from tensions in the Middle East, the enforcement of US sanctions, and tensions in the Middle East.
Expectations are that potential interest rate cuts from the Federal Reserve in 2024, although abundant spare production capacity should help limit any significant rise in crude.
On the other hand, lower oil prices could be bad news affecting energy companies' profits.
