Written by Kavya Guduru
October 31 (Reuters) – Oil prices will find support from OPEC+ output cuts and sanctions against Russia through the end of the year and into early 2023, a Reuters poll showed on Monday, but a recession could limit further gains.
A survey of 42 economists and analysts predicted benchmark Brent crude LCOc1 will average $101.10 a barrel this year and $95.74 in 2023, compared with estimates of $100.45 and $93.70, respectively, in September.
USA is raw CLc1 forecasts were raised slightly to $96.23 a barrel in 2022 and $90.39 next year, compared with consensus estimates of $95.73 and $88.70 last month.
However, quarterly Brent forecasts point to a gradual downward trend next year, with consensus in the second quarter at $96.38 a barrel, down from $98.01 in the first, and a further drop to $94.70 in the third quarter.
UBS analyst Giovanni Staunova said that the lack of investment, the European ban on Russian oil, OPEC+ cuts production and the end of strategic inventory sales in OECD countries will keep the market tight and prices higher.
Some respondents said Russia could largely maintain exports, but still expected some of its oil to be taken off the market due to EU sanctions.
OPEC+ earlier this month agreed to the biggest production cuts since 2020 in an already tight market that International Energy Agency said, could help push the economy into recession.
The cut prompted Goldman Sachs to raise its 2022 Brent forecast to $104 a barrel and its 2023 forecast to $110.
Goldman also said that the US plan to continue the release of strategic oil reserves will lead to a “limited decline compared to the current level of oil prices”.
However, “with dim prospects for the global economy and the possibility of new COVID lockdown there won’t be much demand growth in China in 2023,” said Frank Schallenberger, head of commodity research at LBBW.
OPEC reduced oil demand growth in 2022 forecast for the fourth time since April and also cut next year’s figure.
“We expect a short and shallow recession sometime in early 2024 to put a small wrench in what we see as a broadly constructive medium-term outlook for oil markets,” said Societe Generale analyst Florent Pellet.
Analysts increase the forecast of oil prices in 2022https://tmsnrt.rs/3WdGEZr
IEA lowers global oil demand growth forecasthttps://tmsnrt.rs/3WdGCkh
(Reporting by Kavia Guduru in Bengaluru; Editing by Arpan Varghese, Noah Browning and Barbara Lewis)
((Kavya.Guduru@thomsonreuters.com;))
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