Oil prices not likely to rise above $100/bbl this year for any sustained period – WoodMac

Must Read

OilNOW is an online-based Information and Resource Centre

U.K. based consultancy group Wood Mackenzie says it is unlikely that oil prices will rise above $100 a barrel (bbl) for any sustained period in this year.

“Under the careful stewardship of OPEC+, the market is back in balance again in 2022 on our forecasts,” said Simon Flowers, Chairman, Chief Analyst and author of The Edge.

Flowers said demand increases by 4.5 million b/d back to pre-pandemic levels of 100 million b/d by Q3, whereas supply rises by 4.8 million b/d, around half from OPEC+.

“Implied inventories show a surplus in Q1 2022 – we do not expect a shortage of supply. Our forecast is for Brent to average US$70/bbl, marginally below 2021,” he pointed out.

Regarding risks, Flowers said due to the impact of the coronavirus and its variants, WoodMac has already trimmed 2022 demand by almost 0.1 million b/d.

The consultancy group does not expect Iran sanctions to be lifted in 2022 but up to 1 million b/d of crude could return to market within months.

As it relates to geopolitics – Flowers said Russia/Ukraine, China/Taiwan and Belarus/Poland/EU are potential flashpoints that could spook markets.

Non-OPEC supply will see countries such as Guyana adding to global output in 2022. ExxonMobil’s Liza Phase 2 Development will soon come on stream, bringing total output this year for the South American county to around 340,000 barrels of oil per day.

- Advertisement -

Latest News

U.S. and Guyana army strengthen military partnership at meeting this week

Leadership from the United States Army 1st Security Force Assistance Brigade (SFAB) and the Guyana Defence Force (GDF) convened...

More Articles Like This