Global oil prices to fall to $70/barrel by end of 2024: Moody's Analytics

Global oil prices are expected to fall to almost $70 per barrel by the end of 2024, said Moody's Analytics in a recent report on the Asia Pacific (APAC) region.

Pointing out the increase in oil prices to $120/barrel in June after Russia's invasion of Ukraine and its fall to $100/barrel in August Moody's Analytic said: "This trend will continue; we expect crude prices to fall to almost $70 a barrel by the end of next year."

"For the APAC region's big oil importers, notably Singapore and Hong Kong, this will ease pinching price pressures," Moody's Analytics said.

According to Moody's Analytics, the impact of oil price increase has been varied for the APAC region.

"For net energy importers such as Thailand, Japan, South Korea and Singapore, household energy bills have risen sharply. But for the region's key energy exporters, Indonesia, Malaysia and Australia, households have been more sheltered," the report notes.

But coal and natural gas prices remain stubbornly high.

The APAC region's big liquified natural gas (LNG) importers, including Japan, South Korea, Taiwan and China, are particularly vulnerable to sticky prices.

Likewise, with coal prices elevated, big importers, including India, Pakistan and Vietnam, are paying more for what they need, Moody's Analytics said.

Although higher commodity prices are hurting households and adding to global inflation pressures, some APAC exporters are benefiting from the price premium.

Indonesia and Malaysia are the region's big oil exporters. Higher crude prices have given each an export price boost.

Likewise, Australia is in the midst of an export boom, with elevated coal and LNG prices pushing its terms of trade to a record high. That's not only helping Australian firms tied to mining, but also government revenue through company profit tax receipts and royalties.

Conversely, energy importers such as South Korea and Japan have seen their import prices jump far more than their exports, resulting in a collapse in their terms of trade, said Moody's Analytics.

Higher import costs are putting downward pressure on the region's key currencies, exacerbating weakness from mounting interest rate differentials with the US.

--IANS

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