Analysts Predict Oil Prices Will Soon Recover After Recent Slide
Oil Prices Expected to Recover in Q2 and Q3 of 2023
Analysts predict that oil prices will start to recover soon after the recent slide, which saw the third consecutive weekly decline, marking the longest losing streak of the year. According to Ed Morse, Global Head of Commodities Research at Citi, the slide is bottoming out with inventories coming off after building up during the first and second months of the year. Morse also stated that the market is moving into a higher demand season, and the impact of OPEC+'s recent production cuts is being felt. ANZ, a financial services company, also predicts that the oil slump will soon bottom out, with global oil demand set to grow by 2 million barrels per day, keeping the market under-supplied throughout 2023. Goldman Sachs has maintained its forecast of higher crude oil prices, with Brent rising to $95 per barrel by December 2023 and $100 per barrel by April 2024.
The slip in oil prices is attributed to a confluence of economic concerns, including the U.S. Federal Reserve's quarter percentage point hike in interest rates and a surprise contraction in China's April manufacturing activity, which threw a shade of doubt over the country's commodity demand. A tightening oil market in the second half of 2023 will rely more heavily on OPEC+.