Barclays raises crude price forecast in 2022 thanks to faster inventory reduction

Stock image of the Barclays logo in front of a stock chart on a screen in this illustrative photograph

© Reuters / Dado Ruvic
Stock image of the Barclays logo in front of a stock chart on a screen in this illustrative photograph

Nov 23 (Reuters) – Barclays raised its oil price forecasts for 2022 on Tuesday as it expects a faster-than-expected decline in inventories as well as a cautious supply response to offset a modest surplus next year.

The bank raised its 2022 average price forecast by $ 3 to $ 80 and $ 77 per barrel for Brent and West Texas Intermediate (WTI), respectively.

Oil prices fell Tuesday on debate over a possible release of oil reserves from the United States, Japan and India to control prices despite the threat of faltering demand as COVID-19 cases rise in Europe .

Barclays expects a smaller deficit in the fourth quarter to turn into a surplus in the first three months of 2022, somewhat ahead of the previously anticipated second quarter, but said a lower starting point for potential inventory build-ups next year should offset this. with profit.

“We believe that Strategic Petroleum Reserves are not a sustainable source of supply and the effect of such intervention in the market would be only temporary,” the bank said in a note.

The United States is expected to announce a loan of crude from its emergency reserve on Tuesday, in an attempt to lower energy prices, said a Joe Biden government source with knowledge of the situation.

Barclays said a persistent spike in COVID-19 cases poses significant risks to its outlook as it could affect demand, although OPEC + would likely slow or even halt its ongoing reduction in supply restrictions in response to a material slowdown in demand.

The Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC +, agreed earlier this month to stick to plans to increase oil production by 400,000 barrels a day starting in December.

(Report by Nakul Iyer in Bangalore; edited in Spanish by Carlos Serrano)

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