Oil prices are likely to end 2023 down approximate 10 percent, marking the first annual decrease in two years. The downward trend is attributed to several factors, including geopolitical concerns, production cuts, and global initiatives aimed at curbing inflation.
Analysts say these factors have contributed to significant volatility in oil prices throughout the year, influencing the overall trajectory and resulting in an annual reduction.
Oil prices stabilised on December 29 following a 3 percent fall the previous day because of an increasing number of shipping firms preparing to resume transit through the Red Sea route.
Brent crude futures showed an increase of 18 cents, or 0.2 percent, reaching $77.33 per barrel on December 29, while US West Texas Intermediate (WTI) crude futures were trading 11 cents higher at $71.88 a barrel in early Asian trade.
At the current levels, both Brent crude futures and WTI crude futures are likely to end the year at their lowest year-end levels since 2020. This period in 2020 marked the height of the Covid-19 pandemic, severely impacting global demand for oil and causing a significant downturn in prices.
Oil prices are set to register a third consecutive monthly decline, primarily driven by growing concerns about diminishing demand, which outweigh fears over potential disruptions in supply stemming from conflicts in the Middle East. Despite ongoing geopolitical risks, the impact of production cuts has been insufficient to provide sustained support to prices, leading to a nearly 20 percent decline from the year’s peak.
Gold rises on optimism over potential US interest rate cuts
Gold prices are poised to end the year as their most successful in three years, fuelled by growing expectations of US interest rate cuts in 2024. The persistent conflict in Ukraine and heightened tensions in the Middle East have heightened demand for safe-haven assets, providing sustained support to gold’s positive performance throughout the year.
