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Tuesday, December 7, 2021

Crude oil – WTI and Brent. What will be the price in the coming months – analysts’ forecasts

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In the coming months, oil prices will remain quite high, analysts predict. They add that the demand is growing, the winter promises to be frosty, and because of the expensive gas, the energy industry has turned to other fuels – including oil.

Oil prices – analysts’ forecasts

UBS analysts expect Brent crude oil to be at $ 90 between December and March. a barrel, and for the rest of 2022 – $ 85

The US government agency EIA in its latest forecasts expects the average price of Brent crude oil for the entire 2021 to be $ 81, up $ 10. more than in previous estimates. For 2022, the EIA estimates the average price at $ 72.

On the demand side, OPEC expects a slight decline this year as compared to previous forecasts, and in the next year it will maintain expectations and increase daily consumption by 4.2 million barrels per day to the level of 100.8 million.

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Petroleum. Gas prices affect the market

According to the chief economist of PKN Orlen Adam Czyżewski, not so long ago, a steady decline in prices was expected until next year, which was caused by the stabilization of demand after the sharp increase at the beginning of this year. At the same time, the OPEC countries planned a gradual increase in production, which together should lead to a reduction in prices, he pointed out.

These forecasts were correct until mid-August, when oil prices began to rise. – It turned out that an unexpected factor from outside the oil market appeared – where possible switching the energy sector to other fuels due to high gas prices. By the end of the year, additional demand from this source is estimated at 500,000 barrels per day – noted Czyżewski. Thus, as he assessed, the persistence of the increased demand will depend on the situation on the gas market. – The drop in oil prices, which we already expected, will not appear until the beginning of next year – added the chief economist of PKN Orlen.

As he emphasized, the oil market is well-balanced, reserves are at a normal, safe level. However, high gas prices translate into a certain gap in the oil market and therefore prices tend to go up.

– They will fall if the Russians supply more gas to Europe, or the winter is milder than expected, or OPEC increases production – said Czyżewski.

Oil prices – analysts predict an expensive winter

E-petrol.pl analyst Jakub Bogucki also points to an increased demand for oil due to high prices of other energy carriers. – Under such conditions, prices tend to rise, and meeting demand and calming prices down is neither quick nor easy. There are currently no easy ways to increase the supply – said Bogucki. We are dealing with a growing demand all the time, related to, inter alia, with rising prices of other energy carriers, he noted.

– In the conditions of the announced cold winter and the increased demand for fuels, there will be no means of quickly satisfying the additional demand on the international market, and thus the prices will be relatively high – assessed Bogucki. As he added, he did not expect, for example, a rapid increase in oil production from shale in the US, as a result of “the specter of a much more expensive winter”.

In the opinion of the e-petrol.pl analyst, radical changes on the crude oil market should not be expected. On the other hand, the factor that will be at least heavily influenced by the market in the coming months will be the implementation of the production limits within the OPEC + group.

Main photo source: Shutterstock

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