BofA Global Research Reveals Latest Oil Price Forecasts
BofA Global Research now expects Brent to average $88 a barrel this year, according to a new report sent to Rigzone by the company, in which BofA Global Research published its latest oil price forecasts for 2023 and beyond.
“Coupled with limited US shale supply growth and OPEC’s firm control of the market, we now expect China’s reopening to result in Brent crude prices averaging $88 per barrel in 2023, compared at $100 a barrel previously and $90 a barrel in 2024,” said the BofA Global Research report.
BofA Global Research releases its latest oil price forecasts for 2023 and beyond.
“Why? Russian oil production has beaten expectations in recent months… Still, oil prices should recover as mobility in the Asian region gains momentum over the next 18 months,” the report added.
“If Europe and the US avoid a recession, global oil consumption could increase by 1.8 million barrels per day year-on-year in 2023 and 1.4 million barrels per day in 2024. Thereafter, oil demand should embark on a much slower growth trajectory into 2025 and beyond, averaging just 400,000 barrels per day in 2026-28 in our forecasts,” the report continued.
BofA Global Research noted in the report that this “oil demand slowdown should be met with limited supply increases due to structural underinvestment in the energy sector amid rising EV sales through the end of the decade.”
“In this ‘race to the bottom’, we continue to believe that Brent prices will average $60 to $80 per barrel through 2028 to keep the oil market balanced. As a point of reference, immediate and five-year Brent prices have averaged ~$70 and ~$60 per barrel, respectively, over the past five years,” the company added in the report.
Going forward, oil prices should be supported by increased capital discipline across the global oil industry and thinning of spare capacity, BofA Global Research said in the report.
“But in a race to decarbonize by 2050, when both oil demand and supply must contract, any major future imbalances will likely be offset by sharp swings in oil prices,” the company warned in the report.
BofA Global Research also stated in the report that a large spike in oil prices is unlikely, “but still possible if Russia or another producer experiences a major disruption.”
Brent forecasts
In a separate report sent to Rigzone on Feb. 21, Standard Chartered predicted that Brent prices would average $91 a barrel in 2023, $98 a barrel in 2024 and $109 a barrel in 2025 . The report assumed Brent would average $90 a barrel in the second quarter of this year, $88 a barrel in the third quarter, $93 a barrel in the fourth quarter, $92 a barrel in the first quarter of 2024 and $94 a barrel barrels in the second quarter of next year.
A previous Standard Chartered report sent to Rigzone on Jan. 25 predicted exactly the same Brent prices.
Earlier this month, Fitch Solutions Country Risk & Industry Research said in a report that Brent crude oil averaged $95 a barrel in 2023, $88 a barrel in 2024 and 2025, and $85 a barrel in 2026 and 2027. Price forecasts through 2026 were unchanged from a previous Fitch Solutions oil price forecast report sent to Rigzone in early December 2022. This report did not include price predictions for 2027.
In another report sent to Rigzone this month, JP Morgan said it had left its oil price forecast unchanged at $90 a barrel.
“At this point, we elect to leave our price forecast unchanged at $90 a barrel and maintain our view that absent major geopolitical events, oil prices would have a difficult time breaching $100 this year,” the company explained in the report.
“While we see Brent rallying from $85 in Q1 23 to $89 in Q2 and ending the year at $94, it should be a slow grind that mitigates price volatility,” the company added.
According to its most recent short-term energy outlook, released in February, the US Energy Information Administration projects the Brent spot average to be $83.63 per barrel in 2023 and $77.57 per barrel in 2024. In their previous STEO, published in January , the EIA predicted that the Brent spot price would average $83.10 per barrel in 2023 and $77.57 per barrel in 2024.
At the time of writing, Brent Crude Oil is trading at $83.00 per barrel. Brent has been up and down this year, closing at $77.84 a barrel on Jan 4th, $88.19 a barrel on Jan 23rd, $79.94 a barrel on Feb 3rd, on Feb 13th at $86.61 a barrel and on February 22 at $80.6 a barrel.
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