Crude oil prices were on a roller coaster ride in 2022, going north of $130/barrel in March amid the Russian invasion of Ukraine. Today, West Texas Intermediate (CL=F) is trading at around $80 while Brent International (BZ=F) is hovering above $83/barrel.
A slowing worldwide economy, China’s recent lockdowns, and a stronger dollar have brought the price of oil down more than 23% in the last six months.
As part of our series, “What to do in a bear market,” we checked in with economists and oil analysts to get their forecast for the commodity in 2023. Here are some of their predictions and the reasons behind them.
Average oil price/barrel projections:
Citi: Brent $80, WTI $75
“Our base case, by the way, is that oil demand growth next year is going to be around 1.2 or 1.3 million barrels a day. And our base case is that supply will be growing by twice that amount over the course of the next year, a good bit of that coming from the Western Hemisphere, from the US, Brazil, Canada, Guyana, Argentina, maybe Venezuela and even Mexico.”
– Ed Morse, Citi global head of Commodities Research on Yahoo Finance Live
JPMorgan: Brent $90
“Our forecast of $90 Brent in 2023 rests on the view that OPEC+ alliance will do the heavy lifting to keep markets balanced next year. We expect supply to grow at 30% above the pace of demand in 2023, as Russian production fully normalizes and a combination of conventional (Brazil, Norway, Guyana) and nonconventional projects (US, Canada, Argentina) supplies an additional 1.6 mbd.”