BAKU, Azerbaijan, Sept.18
By Leman Zeynalova – Trend:
Oil prices are expected to fall due to rising global oil supply, rather than dwindling demand, Trend reports with reference to the UK-based Capital Economics research and consulting company.
The prices for Brent and West Texas Intermediate (WTI) oil will see a downward trend up until the end of 2022, according to Capital Economics.
The company forecast Brent prices to stand at $73 per barrel in Q3 2021, before falling to $70 per barrel in the last quarter of the year. The next year will start with $68 per barrel in Q1 2022, then gradually dropping to $68 per barrel in Q2, $65 per barrel in Q3 and $60 per barrel in Q4.
As for WTI, the prices will rise from the current $70 per barrel to $73 per barrel in Q3 2021 and $68 per barrel in Q4 2021. WTI prices will continue downward trend in 2022 with $66 per barrel in Q1, $63 per barrel in Q2, $61 per barrel in Q3 and $58 per barrel in Q4.
“In fact, we think demand will remain quite strong as the global economy continues to recover, while considerable production capacity that was taken offline during the pandemic floods back onto the market. As a result, even if oil prices fall, total earnings of companies in the MSCI EM EMEA Energy Index could continue to grow a bit,” said the company.
Capital Economics expects any drag from the energy sector to be compensated for elsewhere.
“Outside the energy sector, we think the MSCI EM EMEA Index is fairly well placed to benefit from the further stock market rotation we forecast. But it has also outperformed other EM equities on a sectoral level this year, perhaps reflecting the improved economic outlook in EMEA compared to much of the rest of the emerging world. In general, we think this will continue, with economic recoveries across EMEA continuing to outshine those in many other EMs.
Bringing this all together, we expect further gains in the MSCI EM EMEA Index over the coming years, even if oil prices fall back. We forecast a ~8 percent annualized gain in the MSCI EM EMEA Index between now and 2023, compared with ~5 percent for the MSCI EM Index by end-2023. We suspect gains will be largest in those stock markets that are best positioned to benefit from the rapid growth we forecast in the region, such as in Hungary and Czechia,” said the company.
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