Oil prices will find support from OPEC+ output cuts and sanctions on Russia for the rest of the year and into the early part of 2023, a Reuters poll showed on Monday, but a recession could limit further gains.
A survey of 42 economists and analysts forecast benchmark Brent crude would average $101.10 a barrel this year, and $95.74 in 2023, up from estimates of $100.45 and $93.70 respectively in September.
U.S. crude forecasts were raised slightly to $96.23 a barrel in 2022 and $90.39 next year, from the $95.73 and $88.70 consensus last month.
However, on a quarterly basis, the Brent forecasts indicated a gradual trend downward next year, with the second quarter consensus at $96.38 a barrel versus $98.01 in the first, and a further dip to $94.70 in the third quarter.
UBS analyst Giovanni Staunovo said underinvestment, the European ban on Russian oil, OPEC+ production cuts and the end of strategic sales of inventories in OECD countries will keep the market tight and prices higher.
Some respondents said Russia might be able to largely keep exports flowing but still expected some of its oil to be taken off the market due to EU sanctions.
OPEC+ early this month agreed to the largest output cut since 2020 in an already tight market, which the International Energy Agency said could help push the economy into recession.
The cut prompted Goldman Sachs to raise its 2022 Brent forecast to $104 per barrel and 2023 forecast to $110.
Goldman also said the U.S. plan to continue releasing Strategic Petroleum Reserves would lead to “limited downside from current crude price levels”.
However, “with dim perspectives for the world economy and the possibility of new COVID lockdowns in China, there won’t be much demand growth in 2023,” said Frank Schallenberger, head of commodity research at LBBW.
OPEC has cut its 2022 oil demand growth forecast for a fourth time since April and also trimmed next year’s figure.
“We expect a short and shallow recession some time early in 2024 to put a small spanner in the works of what we believe to be a generally constructive medium-term outlook for the oil markets,” said Societe Generale analyst Florent Pele.