Oil 2024: Will It Be the Year of Opportunities for Investors?

The 2024 oil price forecast is shaping up to be one of the most debated topics in energy markets. With WTI hovering around $81 mid-year and Brent near $84.78, we find ourselves in a scenario marked by volatility but also clear opportunities for those who know where to look.

The Current Oil Market Outlook

The journey of oil in 2024 has been a roller coaster. We started the year with high prices close to $100 per barrel, driven by winter demand and geopolitical tensions. By February, prices jumped nearly to $120, reflecting accelerated consumption in the United States. But March brought significant corrections when the global economic outlook changed.

What’s interesting is what happened afterward. The second quarter saw a consolidation between $85 and $90. The reason? A stronger dollar than expected, fueled by Federal Reserve policies that keep interest rates high. This created a vicious circle: more expensive debt, lower demand, and a US dollar that increased the cost of crude for international buyers.

Today, at the end of June, we observe a slight recovery. WTI struggles to surpass $80.9 while Brent tries to consolidate above $84. But here’s the crucial part: this movement has very clear technical characteristics suggesting continuity.

Important Technical Signals

The crossing of the 50-day moving average above the 200-day in both main indices—WTI and Brent—is one of those signals traders respect. The MACD indicator confirms increasing positive momentum. For WTI, decisive resistance is at $82; for Brent, at $86. Breaking these levels could trigger new gains.

What makes this moment special is that trading volume supports these movements. We are not facing a weak rebound but a structural change where buyers are taking positions.

Why Oil Remains Relevant

Many investors believe oil is a thing of the past. Nothing could be further from the truth. Yes, renewable energies are growing, but global crude demand remains colossal. The US consumes excessively, China needs huge volumes for its industry, and OPEC+ continues to be the price arbiter.

Including oil in a diversified portfolio remains valid for a fundamental reason: it acts as a hedge against inflation. When money loses value, commodities—especially energy ones—maintain or gain purchasing power. Leading oil company stocks like ExxonMobil, Chevron, and BP not only rise with the barrel price but also pay consistent dividends and are now investing simultaneously in renewables, reducing concentrated risk.

Ways to Enter the Oil Market

If you decide to participate, there are multiple paths:

Direct stocks: Buy shares of major oil companies. Simple, regulated, with secure dividends. Lower comparative risk but limited upside potential.

Oil ETFs: Funds like the United States Oil Fund (USO) replicate the performance of oil futures without managing complex contracts. Direct exposure to price, guaranteed liquidity.

CFDs (CFDs): Speculate on WTI and Brent without owning the asset. Allow gains in bullish and bearish markets. Warning: leverage magnifies gains and losses.

Energy indices: The S&P Energy Index offers diversified exposure to multiple sector companies. Distributes individual risk and captures the industry’s overall movement.

What Could Change Everything

The factors that truly move prices are known but unpredictable:

Geopolitics: Conflicts in the Middle East or ongoing tensions in Ukraine. Escalation causes fears of supply disruption, and prices jump.

OPEC: Its production decisions are fundamental. Reducing supply raises prices; increasing production puts downward pressure.

Global economy: Recession reduces demand. Growth stimulates it. China is the critical variable here—any weakness in its economy is immediately reflected.

US dollar: Strong currency = more expensive crude for the rest of the world = lower demand. It’s almost a perfect inverse.

Energy transition: Stricter environmental regulations could impact production and demand in the medium term.

Projections for 2025: What to Expect

The US Energy Information Administration (EIA) projects Brent averaging $88 in the first quarter of 2025, gradually decreasing to $83 by year-end. WTI will follow a similar pattern: $87 average Q1 2025, declining as global reserves increase.

Why this decrease? Increased production outside OPEC+, moderation in global demand. This is the base scenario, assuming no geopolitical shocks.

Risks You Should Not Ignore

Investing in oil involves specific risks. Volatility is permanent—history includes drops from $120 to $30 in (2008-2009), collapse to $12 in April 2020 due to COVID. This can happen again.

Environmental regulations may become more restrictive without notice. Governments may shift toward greener policies. Operational risks in exploration and production are high—costly accidents happen.

CFDs and futures increase risks due to leverage. A $100,000 position with 10x leverage collapses if the price drops 10%. Not for amateurs.

Recommended Strategy for 2024-2025

For conservative investors: stocks of major oil companies with dividends. Low risk, steady returns.

For moderate investors: a mix of stocks + ETFs. Sector diversification.

For aggressive investors: CFDs or futures with very clear stops. Rigorously control positions.

The reality is that the 2024 oil price forecast suggests opportunities if you enter strategically. The moving average crossover, positive momentum, and global demand continue to support bullish positions. But constant monitoring of geopolitics, OPEC+ decisions, and dollar strength is mandatory.

Oil will remain essential to the global economy for years. The energy transition is real but gradual. Those who understand these balances and enter cautiously can benefit significantly over the next 12-18 months.