Leading global investment bank, Goldman Sachs is projecting Brent crude price to rise to $86 per barrel by the end of 2023.
Earlier today, July 24, Goldman’s head of oil research Daan Struyven told CNBC‘s Squawk Box Asia that Brent crude could rise from just above $80 per barrel now to $86 per barrel by year-end.
He also said the Bank expects sizable deficits by the second half of 2023, as OPEC+ cuts get implemented.
Struyven also mentioned that the fact that G20 leaders who met in India this past weekend, failed to reach an agreement on the phase-out of fossil fuels is because the uncertainty around future crude oil demand is substantial.
Oil prices are set to rise on supply struggles
Meanwhile, speaking to CNBC on the sidelines of a meeting of energy ministers from the group of the 20 leading industrial economies (G20) in Goa, India, on Saturday, July 22, Joseph McMonigle, secretary general of the International Energy Forum said that oil prices are set to rise in the second half of the year as supply struggles to meet demand.
McMonigle highlighted the fact that crude oil demand bounced back to pre-Covid levels quickly, however, supply is having a tougher time in catching up and the only factor moderating oil prices right now is the fear of a looming recession.
It is important to note that as of Monday, July 24, Brent crude was $81.80 per barrel at 2:18 pm (GMT+1).
McMonigle said:
- “So, for the second half of this year, we’re going to have serious problems with supply keeping up, and as a result, you’re going to see prices respond to that. India and China combined will make up 2 million barrels a day of demand pick-up in the second half of this year.
- “We’re going to see much steeper decreases in inventory, which will be a signal to the market that demand is picking up. So, you’re going to see prices respond to that.”
What happens to Nigeria if oil prices increase?
As of June 2023, Nigeria was producing a combined rate of 1.48 million barrels per day (for both condensates and crude oil). During an interview on July 6, Gabriel Aduda, the Permanent Secretary at Nigeria’s Ministry of Petroleum Resources, said that the current oil prices are favourable for Nigeria’s oil sector, allowing it to perform well.
He said that Nigeria’s oil sector is currently benefiting from the existing oil prices and at the same time, resilient enough to withstand potential increases in oil prices.
