The price of Brent crude is forecast to average $92 per barrel in 2023, down from a projected $100 per barrel in 2022, the World Bank’s October 2022 Commodity Markets Outlook has revealed.
It will however ease to $80 per barrel in 2024.
According to the report, oil consumption is expected to continue to increase by just under 2% in 2023 as China gradually reopens, and “as switching from natural gas to oil continues, especially in electricity generation”.
Again, a sharper-than-expected slowdown in global growth and continued Covid-19 restrictions in China are the key downside risks to oil consumption.
During previous global recessions oil demand has declined by about 2% in the first year and 1% in the second, although with wide variation.
The report further said oil markets are expected to tighten over the next few months as additional sanctions restrict exports from Russia, releases of oil from strategic reserves in several countries come to an end, and as OPEC+ members cut production.
This will more than offset the effect of rising production in a few countries, primarily the United States. The outlook is subject to numerous risks, especially on the supply side.
First, production in the United States could disappoint as producers prioritise returning cash to shareholders over increasing output, and higher input costs constrain new investment.
Second, the outlook for Russia’s production depends on the impact of trade measures. Russia’s exports next year could be as much as 2.0 million barrels per day lower, as the EU embargo on Russian oil and oil products (as well as restrictions on access to EU insurance and shipping services) comes into effect.
The proposed G7 oil price cap could also affect the flow of oil from Russia, but it is an untested mechanism and would need the participation of large emerging market and developing economies to achieve its objectives.
Third, releases of crude oil from strategic reserves, including the U.S. are due to end this year; while these could be extended further, it would risk leaving strategic inventories at very low levels.
Latest Stories
-
Reflections: 50 Lessons at 50
10 mins -
NCCE briefs Council of State on civic plans for 2024
15 mins -
Ecobank Group reports Profit Before Tax of $581m, on net revenue of $2.1bn for 2023
23 mins -
More businesses are working to move out of Ghana – Food and Beverages Association
24 mins -
Empowering Ghana’s Environmental Narrative: Celebrating World Press Freedom Day 2024
35 mins -
AG hasn’t closed investigations into Cecilia Dapaah’s case – Spokesman
36 mins -
Ghana Tourism Authority celebrates ‘Feast Ghana’ on May Day with a Taste of Culture
41 mins -
Fella Makafui gets emotional and teary-eyed reacting to old video with Medikal
53 mins -
Agogo Presby Hospital celebrates staff over zero maternal death record
2 hours -
Ghana isn’t broke to procure high and low-voltage poles – Energy Minister
2 hours -
Appiatse residents handed keys to newly constructed homes
2 hours -
Dumsor: Mahama the only President to superintend ‘dum dum’ for 4 years – Opoku Prempeh
2 hours -
Burnley sign partnership deal with fan-backed scouting platform Nordensa
3 hours -
Akesse Brempong, MOG Music, Afronita, Dope Nation to perform at Nsoromma Season 6 Grand Finale
3 hours -
Hopeson Adorye to form ‘Jail Them’ advocacy group
4 hours