BAKU, Azerbaijan, April 28. Brent oil prices are expected to average $84/bbl in 2023, as compared to nearly $100/bbl in 2022, Trend reports with reference to the World Bank’s Commodity Markets Outlook.
It is a downward revision from October 2022, primarily due to a slower growth prospects in advanced economies.
However, the WB analysts believe that China’s economic recovery will have bullish effect on demand growth in 2023-24. The oil supply will be weaker due to OPEC+ output quotas and limits on capacity in most other regions.
Prices are forecast to rise slightly in 2024 and to remain higher than their 2015-19 monthly average of $57/bbl.
The report reveals that oil consumption will grow by 2 percent in 2023 to a new all-time high of 101.9 mb/d, according to the International Energy Agency’s April assessment. China’s economic recovery in will account for more than half of the expected increase in global oil demand.
The resurgence of travel-related sectors will drive the demand growth for gasoline and jet fuel. Other Asian countries account for most of the rest of anticipated global oil demand growth.
“Outside of Asia, oil demand growth is expected to moderate in 2023. This reflects sluggish industrial activity and the continuing transition to a lowcarbon-emissions economy. The outlook for oil production assumes a smaller increase of 1.2 percent in 2023, which will take production to an all-time high of 101 mb/d. The increase is largely accounted for by a further expansion of U.S. production of 1 mb/d, with smaller additions by Brazil (0.3 mb/d), Guyana (0.2 mb/d), Canada (0.1 mb/d), and Norway (0.1 mb/d). Supply of the OPEC+ group of countries (excluding Russia) is assumed to remain near current levels, in line with the group’s guidance, which would allow a modest decrease compared to 2022. Russia’s production is expected to decline by between 0.4 mb/d and 0.8 mb/d in 2023 (IEA 2023c; EIA 2023a; OPEC 2023).”
---
Follow the author on Twitter: @Lyaman_Zeyn