A steady growth in oil supplies from countries outside the Opec+ cartel and an uncertain economic outlook are expected to keep a lid on the price of crude this year, even as the Israel-Hamas conflict threatens to spread to the rest of the region.

Oil prices, which clocked only modest gains in the first week of 2024, dropped on Monday after Saudi Arabia cut its official selling price for oil exports in February. Brent crude slumped 4 per cent to $75.65 a barrel while West Texas Intermediate, the US equivalent, fell 4.8 per cent to $70.25.

Yet the declines leaves crude prices only a few dollars below the $80 a barrel that a consensus of analysts expect Brent, the international benchmark, to reach over the next 12 months. The prospect of oversupply, an uncertain economic outlook and a lack of clarity of how tensions in the Middle East will play out have left analysts reluctant to make aggressive forecasts in either direction.