Oil Market 2023
The outgoing 2022 was a record year for the oil market since 2013. The average price per barrel of Brent was about $100, and at the moment the quotes rose to $137 per barrel. Consider the trends and factors that will affect the price of oil in 2023. Подробнее на БКС Экспресс: https://bcs-express.ru/novosti-i-analitika/rynok-nefti-2023-v-poiskakh-balansa
Offer:
The world's largest producers are the OPEC cartel (about 30%), the United States (12%) and Russia (10-11%). Only the United States plans to significantly increase production, while OPEC can voluntarily cut production, and Russia is forced to, due to the embargo in the EU and ceiling prices.
It is not necessary to count on tangible growth outside of this trio due to the global underinvestment of the industry. Pandemic forecasts to reduce consumption and the course towards alternative energy in various aspects of investment in production, so many new projects were left without funding. If various suspicions arise, 3 to 5 years can be prescribed to compensate for this gap.
Demand:
The focus on the demand side is now two key trends: the prospect of a recession due to higher interest rates by the Fed and the possible lifting of lockdowns in China. The IEA and OPEC expect demand growth of 1.7 million b/d and 2.25 million b/d, respectively, but these estimates are based on fairly optimistic forecasts for global GDP growth. In fact, the risks are shifted in favor of a downward revision of forecasts, which gives reason to conservatively assess the level of oil consumption in 2023.
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What will oil prices be like in 2023?
In 2023, demand may outpace supply by 0.2-0.4 million b/d, which encourages high prices to remain. The peak may be passed in February-March, when China's abandonment of the "zero tolerance" policy will coincide with a drawdown in Russian production against the backdrop of the entry into force of the embargo on petroleum products. At the moment, quotes may even be above $100 per barrel, but these are unlikely to be sustainable levels.
In the future, quotes may gradually decline. It is likely that the trajectory of global GDP growth will turn out to be slightly worse than current forecasts suggest, which may become apparent as early as in the second quarter. Along with the slowdown in the economy, demand may also cool, but OPEC + will stop any risks of a surplus by maintaining prices in the corridor from $70 per barrel and above.
As a result, average annual prices for Brent oil may be in the range of $80-90 per barrel