The survey of 30 economists and analysts forecast that Brent crude will average $89.37 per barrel in 2023, roughly 4.6% lower than the $93.65 consensus in a November survey. U.S. crude is predicted to average $84.84 per barrel in 2023, compared to the previous month's agreement of $87.80.
The survey of 30 economists and analysts forecast that Brent crude will average $89.37 per barrel in 2023, roughly 4.6% lower than the $93.65 consensus in a November survey. U.S. crude is predicted to average $84.84 per barrel in 2023, compared to the previous month's agreement of $87.80.
Impact of Russian Sanctions on Oil Prices Expected to Be Minimal
The impact of Western sanctions on Russian oil is expected to be minimal, according to the Reuters poll. Analysts at Goldman Sachs said in a note,
"We do not expect an impact from the price cap, which was designed to give bargaining power to third-country buyers."
In the event of a severe drop in Russian exports, which is not expected to occur, data and analytics firm Kpler said that OPEC+ is likely ready to increase output to prevent prices from rising too high.
Global Economic Weakness to Weigh on Oil Demand
According to Bradley Saunders, assistant economist at Capital Economics, a global economic recession is expected in early 2023 as the effects of high inflation and rising interest rates are felt. Oil demand is also likely to be impacted by COVID-19 cases in China, the world's largest crude oil importer. Edward Moya, the senior analyst with OANDA, said that
"the oil market is still tight despite a weakening global demand outlook as recession fears run wild"
and added that China would be the primary focus in the first quarter of next year.
Expected Increase in Oil Demand in Second Half of 2023
Most analysts predict that oil demand will grow significantly in the second half of 2023, driven by the easing of COVID-19 restrictions in China and by central banks adopting a less aggressive approach to interest rates.
