Recent oil price strength to persist in near-term, says OIES

Oil&Gas Materials 11 November 2021 11:39 (UTC +04:00)

BAKU, Azerbaijan, Nov. 11

By Leman Zeynalova - Trend:

The reference forecast of Oxford Institute for Energy Studies (OIES) for Brent stands at $71.6/b in 2021, $80.9/b in 2022 and $76.6/b in 2023, Trend reports with reference to OIES.

“We see the recent price strength persisting in the near-term on the tightness in OECD stocks and fuel switching, but slow returning crude supplies from OPEC+ and more moderate gas-to-oil switching than currently expected are still seen to cap prices in the $80s range. Beyond the near-term, returning supplies are expected to start pulling back prices to the $70/b and $80/b range in H2 2022 as some OPEC+ producers are seen struggling to meet their targets and low investment takes a toll on supply growth elsewhere,” reads the OIES report.

Oxford Institute for Energy Studies believes that this will lead to prices reversing again in 2023 and returning towards $80s.

“A new price bound emerges in the $70/b and $90/b range as supply risks rise. Downside demand side risks dominate in the near-term due to Delta concerns and how much switching will actually take place. Supply risks build progressively to the upside beyond the near-term, on supply bottlenecks both in OPEC+ and non-OPEC, while Iran’s supply outlook remains a wildcard. Overall, the risks to the outlook remain fairly balanced. Global oil demand growth remains solid at 5.4 mb/d in 2021, 3.6 mb/d in 2022 and 2.1 mb/d in 2023. Global oil supply is set to grow by 1.3 mb/d in 2021, 5.9 mb/d in 2022 and 2.2 mb/d in 2023,” reads the report.


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