The recent behavior of theBrentand WTI, which have returned to January lows after the anti-Covid protests in China, has led the different investment houses to review their positions in this regard for next year.
According to JP Morgan (NYSE):.JPM), in 2023 the market ofgold”will remain tight”, with an average of 90 dollars per barrel, and the OPEC+ group could decide to intervene in the market by reducing production
“The war in Russia,” they explain in the commercial bank, “has led us to raise our forecasts on the average price of Brent in 2022 to 104 dollars and in 2023 to 98 dollars, with a maximum of 114 dollars in the second quarter of 2002 (March 2022).
However, they add from JPM, “we now predict an average price 8 dollars lower by 2023, on the basis that Russian production normalizes to pre-war levels by mid-2023.”
Overall, Jamie Dimon’s bank expects Brent to remain at an average of “$90 per barrel in 2023 and $98 per barrel in 2024.”
However, its competitor Goldman Sachs (NYSE:GS) has a different opinion. Interviewed by CNBC at Goldman Sachs’ Carbonomics conference in London, Jeff Currie, global head of commodities at Goldman Sachs, warned of the three main risks weighing on thepetroleum.
“The first is the dollar,” says Currie, adding as a second factor that “Covid and China are worth more than OPEC’s cuts for the month of November,” while the third factor “is that Russia is already introducing barrels into the market right now, ahead of the December 5 deadline under the Western embargo.”
However, according to the GS manager, the outlook for 2023 “is very positive”, so the bank “remains firm in its forecast of Brent at $ 110 per barrel for next year”.
“Demand is falling again in China, considering what is happening. I think the key issue in China right now is the risk of a forced economic revival. This means, on the other hand, that there will be ‘self-imposed’ restrictions: people won’t want to get on trains, they won’t want to go to work, and demand will drop even lower.”
Therefore, according to Currie, OPEC will have to debate whether to “accept a further weakening of demand from China or continue to propose supply cuts.”