The Brent crude oil price has held fairly steady at around US$82 per barrel since Friday.
That's right near the top end of the trading range we've seen since 7 November, when the oil price was still coming down from the 28 September highs of US$97 per barrel.
And it's well up from the lows of US$73 per barrel that Brent crude was trading for on 12 December.
With oil and gas prices tending to move in similar directions, albeit not at equivalent rates, you'll notice some matching moves from S&P/ASX 200 Index (ASX: XJO) energy shares.
Here's how these top Aussie oil and gas companies have performed since the recent high and low water marks.
Woodside Energy Group Ltd (ASX: WDS) shares, for example, are down 15% since 28 September. And Santos Ltd (ASX: STO) shares are down 8% over this period.
Turning to the 12 December oil price lows, the Woodside share price has gained 3% since then while the Santos share price is up 1%.
Did the forecasters get it wrong?
Heading into 2024, consensus forecasts were for Brent crude oil to trade in the US$80 to US$100 per barrel range over the year.
Yet here we are, halfway through February, and the oil price is stuck in the lower end of that range, with Brent having even dipped to US$77 per barrel earlier this month.
While that's good news for motorists – not to mention ASX travel and transport stocks – it's not so good for ASX 200 energy stocks.
With that in mind…
Can ASX 200 energy investors expect a higher oil price in 2024?
Here's what could lift or sink the oil price in the months ahead.
Turning to the pressures first, there are a few predominant headwinds that could keep a lid on energy prices.
First, there's the potential for a slowdown in global demand in 2024 as major economies like China are seeing a downturn in economic growth.
Second, it's looking increasingly likely that interest rates in the United States (the world's top economy), as well as in the EU, Australia and other nations could remain elevated for longer than most analysts were forecasting heading into 2024. This would take a bite out of household incomes, leading to decreased discretionary travel.
And third, there's the United States, the world's top oil producer thanks to the shale revolution.
According to data from the US Energy Information Administration (EIA), US crude oil production notched a fresh record high in December of more than 13.3 million barrels per day.
Now, US production slipped from that record in January. And the EIA doesn't expect the nation to set new records until next February.
But even with the US pumping at levels just below December's all-time highs, that's a lot of oil hitting the markets every day.
Which brings us to what could lift the oil price and help boost ASX 200 energy shares in 2024.
First would be global economic growth, and the accompanying demand for oil and gas, increasing faster than the markets are currently pricing in.
Second, we have OPEC+. While the cartel's pricing powers aren't what they used to be, OPEC and its allies have committed to significant production cuts into the first quarter of this year. And with pressure from Saudi Arabia, I'd expect these cuts to continue so long as the oil price remains vulnerable to a pullback.
And the third factor that could send the oil price sharply higher and boost ASX 200 energy shares would be any major escalation in the ongoing conflict in the Middle East.
While this is the last thing we'd like to see, should the oil-rich region erupt into a wider regional war, traders could quickly send energy prices soaring.
