Barclays on Tuesday lowered its Brent price forecast by $8 a barrel for 2022 and 2023, as it expects a large crude oil surplus in the near term due to “resilient” Russian supplies.
The UK bank now sees Brent crude averaging $103 this year and next, and US West Texas Intermediate (WTI) averaging $99 for both years.
Benchmark Brent futures were trading around $94 a barrel on Tuesday, while WTI futures were slightly lower at $89. [O/R]
The recent price drop is mainly a matter of timing, as resilient Russian supplies before European Union sanctions took effect later this year coincided with heightened concerns about a broader slowdown, the Commission said. bank in a note.
At the end of May, EU leaders agreed to impose an embargo on imports of Russian crude oil which will take full effect by the end of the year, and ban all Russian refined products two months later.
Barclays expects Russian oil production to fall by 1.5 million barrels a day from pre-war levels once EU sanctions on imports and insurance business kick in in force.
Barclays also noted that the actual decline in price forecasts could be limited by a potential response from OPEC+ to a possible slowdown in demand next year following a mild recession.
“We believe the threshold for such intervention would be lower than in 2020 due to possible exemption from supply cuts for Russia due to sanctions and lack of price response from US producers.”
The Organization of the Petroleum Exporting Countries and its allies, led by Russia, or OPEC+, are expected to increase their production target by a mere 100,000 bpd from September.
(Reporting by Bharat Govind Gautam in Bengaluru; Editing by Stephen Coates)
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