Barclays Trimmed 2023 Crude Oil Price Forecast

SEATTLE (Oil Monster): Barclays trimmed its forecast for 2023 crude oil price, mainly due to more than expected resilient output from Russia. Also, it expects the market to slip into deficit during the second half of the year, primarily on account of anticipated rising demand from China.

The bank reduced its average price forecast for Brent crude by $6 per barrel to $92 per barrel.  Also, it expects the West Texas Intermediate (WTI) crudeoee to drop by $7 per barrel to average at $87 per barrel in 2023. According to Barclays, Brent crude is likely to average at $97 per barrel in 2024. Also, WTI crude’s average price is forecast to reach $92 per barrel during the next year.

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The oil market will switch to deficit of approximately half-a million bpd in the second half of the current year, upon maturity of Chinese reopening from pandemic-related restrictions. The anticipated slowdown in supply growth from outside the OPEC+ producer countries will also contribute to the deficit market in H2 2023, Barclays noted.

Meantime, Barclays revised its demand estimates for the current year by 150,000 bpd, driven by improved growth outlook for the U.S. and European region. The Chinese oil demand is projected to increase by 900,000 bpd in 2023.