BAKU, Azerbaijan, November 1. Assuming that the Middle East conflict remains stable, the forecast for Brent crude oil prices in 2023 is an average of $84 per barrel, a slight decrease from the nearly $100 per barrel recorded in 2022, Trend reports.
According to the World Bank's estimations, it is expected that prices will need to reach an average of almost $90 per barrel in the final quarter of 2023. This projection is based on the assumption of an increase in OPEC supply, assuming that Saudi Arabia's voluntary production cuts will be discontinued in January 2024. Non-OPEC+ production growth is expected to slow from approximately 2 m/d this year to 1.4 m/d in 2024, with increased production expected in Brazil, Canada, Guyana, and the US.
While prices are expected to experience a slight decline in 2024 and further decrease in 2025, they are projected to remain approximately 16 percent above the previous 5-year average of $70 per barrel.
WB's outlook for oil production assumes no escalation in the Middle East conflict and anticipates a 1.5-percent production increase in 2024, similar to the growth in 2023, driven by both OPEC+ and non-OPEC+ countries.
Among non-OPEC+ nations, US production growth is expected to slow to 0.5 m/d, with smaller contributions from Brazil, Canada, and Guyana totaling nearly 0.7 m/d. Overall, OPEC+ output is expected to see a modest increase in 2024. Saudi Arabia is not expected to extend its voluntary cuts beyond December 2023 due to budgetary concerns. In contrast, Russia's production is expected to decline by up to 0.3 m/d in 2023 and remain stable in 2024.
Supply from other OPEC+ members is assumed to remain close to current levels in 2024, in line with the group's 2023 guidance but moderately lower than in 2022. Consequently, supply is expected to outpace demand in the first half of 2024 and match demand in the latter part of the year, leading to an increase in inventories. In 2025, oil production and demand are expected to rise as global growth strengthens, and non-OPEC supplies continue to increase.