Standard Chartered Sees $100+ Oil

Analysts at Standard Chartered see the price of Brent oil averaging more than $100 in the next few years, a research note sent to Rigzone earlier this week revealed.

In the note, the analysts also outlined that they had raised their 2022 Brent forecast by $8 per barrel to $75 per barrel and their 2023 Brent forecast by $17 per barrel to $77 per barrel.

“We adjust our price forecasts to reflect the move from a challenging H1-2022 to a more balanced H2-2022 and 2023, through to a mounting supply crunch from 2024 to 2026; we forecast a Brent average of $108 per barrel in 2026,” the analysts stated in the note.

“While the supply crunch does not begin in our model until deep into 2024, we expect the market to get well ahead of it, resulting in high intra-year volatility prices in periods when the short-term reality falls too far short of the medium-term fear,” the analysts added.

Standard Chartered analysts highlighted in the note that they expect demand to average 106.5 million barrels per day in 2026, based on announced and likely government policies. The analysts noted that they expect all of the incremental 5.2 million barrels per day of demand from 2023 to 2026 to come from non-OECD countries.

Non-OPEC supply growth is forecasted to decelerate sharply, from 2.4 million barrels per day in 2022 to 0.3 million barrels per day in 2026, with growth from 2022-26 skewed towards Brazil, Guyana, the U.S. and Russia, the analysts pointed out. The analysts expect the call on OPEC to average 28.4 million barrels per day in 2023, which they outlined is 1.4 million barrels per day less than in 2019. The increase in the call on OPEC across 2022 and 2023 was put at 1.4 million barrels per day by the analysts, who see this call increasing by 3.2 million barrels per day from 2023 to 2026.

Also this week, the U.S. Energy Information Administration (EIA) raised its Brent spot average price forecast for 2022 but lowered it for 2023. The organization now sees Brent spot prices averaging $74.95 per barrel this year, which marks a $4.90 increase on its previous 2022 projection of $70.05, and $67.50 per barrel in 2023.

Earlier this month, Fitch Solutions Country Risk & Industry Research released its latest multi-year oil price forecast, which stretched to 2026. According to its latest projections, the company now sees the average price of Brent hitting $72 per barrel this year, $73 per barrel in 2023, $75 per barrel in 2024, and $78 per barrel in both 2025 and 2026.

At the time of writing, the price of Brent oil stood at $84.52 per barrel.

To contact the author, email andreas.exarheas@rigzone.com