Daily Management Review

Barclays raises oil price forecast for 2022


Barclays Bank has raised its forecast for average oil prices for the next 2022 to $77 and $80 a barrel for WTI and Brent, respectively, Reuters reports.

According to the bank's experts, the market should expect a faster reduction in crude inventories and a cautious supply response.

The bank raised its average price forecast for 2022 by $3: to $80 a barrel of Brent and $77 a barrel of West Texas Intermediate (WTI).

Oil prices fell on Tuesday, November 23, amid speculation that the USA, Japan and India may release their strategic crude stocks to hold down prices, despite the threat of a spike in demand amid a new coronavirus outbreak in Europe.

According to Barclays analysts, the shrinking deficit in Q1-Q4 of this year 2021 will turn into a surplus in Q1-Q2 of 2022. The bank had previously forecast that the oil market would turn surplus in Q2 2022, but at the same time, the credit institution’s analysts believe that a lower starting point for a potential build-up in crude stocks next year should more than make up for this.

"We believe that strategic oil inventories are not a sustainable source of supply and the effect of this intervention on the market will be temporary," Barclays said in a note.

source: reuters.com