After rising above $120 per barrel in mid-June, oil prices have fallen below $100 in recent months and are still falling. Oil price forecasts have become more uncertain as a result of conflicting supply and demand factors. Fears of a recession have grown in both the United States and Europe, potentially reducing demand for oil. The actions of the world’s central banks, which have repeatedly raised interest rates to combat rising inflation, and China’s economic slowdown, have raised the prospect of decreased demand for the commodity. Furthermore, extended sanctions on Russian oil exports have raised concerns about supply from the world’s second-largest producer. In this article, we will discuss the oil market trends and present different Brent oil price predictions.
Will oil prices pause or resume their rally in the remainder of 2022?
Continue reading for an examination of all the factors influencing oil price movements. Moreover, there are the most recent oil price forecasts from analysts. Oil wells in an oil field are silhouetted against clouds.
What are the experts’ predictions for oil prices this year?
After rising above $120 per barrel (bbl) in mid-June, oil prices have fallen below $100/bbl in recent months and are still falling. Oil price forecasts have become more uncertain as a result of conflicting supply and demand factors. Fears of a recession have grown in both the United States and Europe, potentially reducing demand for oil.
Following Russia’s invasion of Ukraine, Brent spiked to $100 in mid-February after trading from $77/bbl to $79/bbl in the final weeks of December 2021 and early 2022. It rose to $139.13 on March 7 in response to US President Joe Biden’s ban on Russian fossil fuel exports. The advantage did not last long. Brent fell below $100 by mid-March, owing to concerns about demand after China, the world’s largest oil importer, imposed new Covid-19 restrictions.
The price gradually recovered above $100. That happened due to supply concerns after more countries joined the US in prohibiting Russian oil imports. In addition, a key role is the expected rebound in demand from China after the country eased its Covid-19 constraints. Brent reached $125 per barrel on June 14, the highest level since March 9, as concerns about slowing global economic growth outweighed supply concerns.
The EU has prohibited all seaborne Russian crude oil and petroleum products, accounting for 90% of the bloc’s current Russian oil imports. The ban is part of a broader set of international sanctions against Russia in response to its invasion of Ukraine. Russian crude output has remained “stubborn,” outperforming expectations, according to ING commodities analyst Warren Patterson. “The oil balance looks more comfortable for the rest of the year,” Patterson said. He added that prices could remain high due to supply concerns from both OPEC and Russia.
Brent oil price predictions forecast: 2022-2023
According to BofA’s 2022 Brent crude oil prices forecast, the price will average $104.48/bbl this year and $100/bbl in 2023. “With oil supply remaining a key constraint and demand remaining below pre-Covid levels,” according to the note from BofA. It forecasted that global oil consumption would fall further over the next two years. According to ANZ Research, the Brent crude oil price will average $113.80 in 2022 and $104.50 in 2023.
“Oil markets will rebalance if we estimate that global oil demand declines by 2.5% as economic activity slows.” This would result in a stabilization of inventories, which would sustain oil prices at $100/bbl.”
It is predicted that the projection for the Brent crude oil price to $105 in 2022 and $85 in 2023 on June 14th. “We anticipate that oil prices will continue to volatile in 2H22 due to supply worries and multi-directional supply variables. While slowing economic growth may put a damper on the demand for oil, it is predicted to rise in 2022 and 2023. Global oil inventories continue to be low. On the supply side, OPEC+ has agreed to a slight increase in output. This, along with an EU embargo on Russian seaborne oil, may exacerbate the tightening of the oil market. However, if the nuclear deal is reached, a resurgence in Libyan oil output and an increase in Iranian oil exports would provide additional supplies.
Keep in mind that expert forecasts of oil prices are vulnerable to inaccuracy. It should not be used in place of your own independent research. Always do your own research before making an investment. Furthermore, never trade or invest money you cannot afford to lose.