Oil prices could stay within the $71 and $79 per barrel bracket for the greater part of 2022, the latest Monetary Policy Report by the Bank of Ghana has revealed.

This is coming despite the commodity trading above $90 dollars in recent times.

The report said the global oil market will be subject to significant uncertainties in 2022, due to the resurgence of the COVID-19 pandemic and its effects on economic growth, oil demand, and the production decisions of oil producing countries.

“The global oil market will be subject to significant uncertainties in 2022, notably due to the resurgence of the COVID-19 pandemic and its effects on economic growth, oil demand, and the production decisions of OPEC+. Restrictions imposed to mitigate the spread of COVID-19 before the emergence of the Omicron variant raise the possibility of a decline in global oil consumption, leading to downward pressures on oil prices. These factors, among others, could keep oil prices volatile between $71 and $79 per barrel during the year.”

Cocoa production may remain below expectations

The report also said the production of cocoa beans may remain below expectations in the 2021/2022 crop season.

“So far into the 2021/22 crop season, cocoa beans arrivals from West Africa’s major cocoa producers remain below last year’s arrivals and may remain below expectations, thereby lending support to cocoa futures prices in upcoming months.”

Additionally, “the new Omicron variant has raised concerns about a possible slowdown in global economic growth. These fears about weakening global economic activity might weigh on cocoa futures in the months ahead”, it said.

Nearby cocoa futures prices in January – March 2022 are forecast to average $2,435-$2,510 a tonne compared with $2,549 a year earlier.

Gold to remain relevant for investors

For gold, the report said the precious metal will remain relevant for investors in 2022 as a risk hedge.

However, “in the outlook, the bullion may be confronted with two key headwinds, namely high nominal interest rates and a potentially stronger dollar in 2022.”

The report added that these negative effects may be offset by some supporting factors such as high inflation, market volatility related to COVID-19, geopolitics, and robust demand from central banks and jewelry consumers. Bullion’s performance will be dependent on which factors outpace the other.

Gold prices are however expected to trade between $1,500 and $1,850 per fine ounce.