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

Global oil prices are expected to fall to around $70 per barrel by the end of 2024, Moody’s Analytics said in its latest report for the Asia Pacific (APAC) region.

Highlighting an increase in oil prices to $120/barrel in June and a fall to $100/barrel in August following Russia’s invasion of Ukraine, Moody’s Analytics said: “This trend will continue; we expect crude prices to drop to around $70/barrel. Late next year.”

“For large oil importers in the APAC region, particularly Singapore and Hong Kong, this will ease pinching price pressures,” Moody’s Analytics said.

According to Moody’s Analytics, the impact of rising oil prices is different 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 major energy exporters, Indonesia, Malaysia and Australia, households have become more sheltered,” the report notes.

But coal and natural gas prices remain stubbornly high.

Large liquefied natural gas (LNG) importers in the APAC region, including Japan, South Korea, Taiwan and China, are particularly vulnerable to sticky prices.

Similarly, with coal prices rising, 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 inflationary pressures, some APAC exporters are benefiting from the price premium.

Indonesia and Malaysia are the region’s largest oil exporters. Higher crude prices have driven up export prices for each.

Likewise, Australia is in an export boom, with elevated coal and LNG prices pushing its terms of trade to record highs. This not only helps Australian firms involved in mining, but also provides government revenue through company profit tax receipts and royalties.

In contrast, energy importers such as South Korea and Japan saw their import prices jump more than their exports, resulting in a decline in their terms of trade, Moody’s Analytics said.

Higher import costs are putting downward pressure on the region’s major currencies, exacerbating weakness from widening interest rate differentials with the US.

— IANS

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(Business Standard staff may have reproduced only the headline and image for this report; the rest of the content was auto-generated from the syndicated feed.)

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