Oil prices end 2023 with a 10% decline, the biggest decline since the pandemic year

Oil futures lost more than 10% on the last trading day of 2023, which saw geopolitical turmoil and concerns about oil production levels among major producers around the world.

Brent crude futures fell 11 cents, or 0.14%, to settle at $77.04, while US West Texas Intermediate crude futures fell 12 cents, or 0.17%, to settle at $71.65.

Both contracts fell more than 10% in 2023, ending the year at their lowest level since 2020, when the coronavirus pandemic undermined demand and led to lower prices.

Brent crude rose 10% and West Texas Intermediate crude rose 7% last year, supported by supply concerns after Russia's invasion of Ukraine.

A Reuters survey of 34 economists and analysts expects Brent crude to average $82.56 a barrel in 2024, down from a November average of $84.43, as global growth eases demand, which they believe will ease demand. Current geopolitical tensions may support prices.

Analysts also questioned the ability of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to stick to supply cuts they had promised to support prices.

OPEC+ is currently cutting production by about six million barrels per day, or 6% of global supply.

OPEC faces weak demand for its crude in the first half of next year, with its share of the global market falling to its lowest level since the pandemic, production cuts and Angola's exit from the group.

Meanwhile, war in the Middle East has raised concerns over potential supply disruptions in the past few months, which are expected to continue into 2024.

(Reuters)