Posted: 05.01.2023 16:41:00

Swiss Investment Bank forecasts oil prices in 2023

The Swiss Investment Bank UBS has predicted that the price of Brent oil will rise to $110 per barrel in H2 2023 – as reported by rg.ru portal

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The bank’s analysts emphasise that it is necessary to take into account such factors as the redirection of Russian oil supplies and underinvestment in the oil industry. Moreover, the demand for this energy resource is expected to recover in a number of emerging markets, in China. According to forecasts, it may even exceed the level of the pre-pandemic 2019 in H2 2023 in the People’s Republic of China.

Against the background of increased demand, oil production in Russia will fall due to restrictions imposed by Western countries. At the same time, production outside the OPEC+ group will likely to grow by 1.3 million barrels. Anyway, experts believe that these volumes won’t be enough to keep the market in balance, so the OPEC +countries will be forced to provide more barrels to the market.

“With OECD oil inventories standing at the lowest level since 2004 and spare capacity set to keep dwindling in 2023, we continue to believe higher prices are needed to slow down oil demand growth and encourage investments in new production,” UBS analysts said.