Barclays cuts crude oil price forecasts due to resilience of Russian production

By: News Team

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Barclays (LON:BARCIt cut its 2023 oil price forecasts on Wednesday, due in part to stronger-than-expected Russian production, saying the market could go into deficit in the second half of the year due to rising demand from China.

The bank cut its average forecasts for Brent and benchmarks West Texas Intermediate (WTI) at $6 per barrel per barrel and $7 per barrel, respectively, up to $92 per barrel and $87 per barrel.

He also forecast Brent to average $97 a barrel next year and WTI $92 a barrel.

The market could post a deficit of 500,000 barrels per day (bpd) in the second half of this year as China’s reopening “matures” after pandemic restrictions and supply growth from outside the OPEC+ producer group slows, analysts added.

China’s oil demand could rise by 500,000 to 600,000 bpd in 2023, Haitham Al Ghais, secretary-general of the Organization of the Petroleum Exporting Countries (OPEC), said Tuesday at the CERAWEEK conference, and global oil demand is forecast to rise by 2.3 million bpd in 2023.

Barclays, meanwhile, revised its 150 demand estimate up 000,2023 bpd, partly due to somewhat better growth prospects for the United States and Europe. Chinese demand will increase by 900,000 bpd this year.

Late last year, the Group of Seven, the European Union and Australia agreed to cap Russian oil prices, in order to deprive Moscow of funds for its war in Ukraine.

According to Barclays, the risk of a slowdown in overall economic activity remains, due to stagnant industrial activity and continued tightening of monetary conditions.

The futures of the Brent crude They were up 0.1 percent at $83.40 a barrel at 1103 GMT, while U.S. WTI CRUDE FUTURES WERE DOWN 0.1 PERCENT at $77.49 a barrel.

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