Why do experts rule out another rise in oil prices this year?

The global economy looks anxiously at the price of oil. After one year 2022 sheer madnessWhere there was talk of a liter of gasoline at three euros or where prices for a barrel of Brent were recorded very close to those already alerted in February, $125 a barrel, it does not seem that 2023 will be a calmer year.

After a first quarter in which the price of oil remained above $80 a barrel, in March, the cost of oil fell dramatically. Hardest hit by the banking crisis They began to look to the future with hope. Mirage. That’s how it was, because OPEC + got down to business. And now the future is uncertain.

Predictions for all tastes

since March, Forecasting About the future of oil prices have not stopped changing. Less than a month ago, oil prices were the lowest since 2021. A scenario that seemed impossible in 2022, which came as a result of High interest rates It was slowing down the economy.

So, the question was on the table: Will the price drop encourage consumption or will OPEC+ step in to artificially increase the price? The response of the oil-producing countries was the second. Specifically, he cut production by 1.66 million barrels per day, starting next May.

The market response was as expected. Brent crude oil barrel was already higher than 85 dollars per barrel Some analysts began to suggest that OPEC + will not abandon its efforts to raise the price of crude oil to $ 100 a barrel. “They’re clearly saying $80 or $90 a barrel is too low, and it’s likely to be over priced,” he said. Well over $100 before they interact and start to increase production, ”predicts Pierre Andurand, a market specialist in the words I collected financial times.

In the same vein, Amrita Sen, director of research at Energy Aspects, expressed the same, who confirmed that Saudi Arabia is considering tightening the rope much more. Sen assures the same newspaper that the country believes the market can hold a future as a barrel of Brent is trading at $120/unit.

At the moment, the file agencies, always more conservative, begin to recalculate their expectations. the Energy information management The US is already contemplating a year in which the price of oil will average 85.01 per barrel, a forecast that raises the expected price by 2.5%. By 2024, they expect prices of just over $81/unit, but this is already 5% more than previous estimates.

Not everyone gets on that boat. Citigroup, for example, predicts that OPEC+ efforts will be in vain and they will not deliver Raise the price of oil Much more than we pay now. They claim that countries such as the United States, Iraq or Venezuela are increasing their production, and therefore they can compensate for the cuts in the OPEC + countries.

from five days Choosing conservatism, claiming how difficult it is to predict behavior in a market Very capricious product It grows or decreases by 10 or 15 dollars per barrel at the slightest change in supply or demand. to support this discourse Small and medium-sized countries show up in oil production, which have increased production since the fall and are making up for repeated announcements of reduced available supply.

And the same concern for everyone

Whatever happens, what analysts seem to agree on is what The problem of a new rise in oil prices. In January there was already talk that with the Chinese reopening, demand (and price) would rise. And there are those who say that, in spite of everything, the producing countries do not have much scope for this Increase your productionDespite their announcement that voluntary sales will continue.

At the moment, at guardian They are again talking about the risks of inflation as a result of higher oil prices and whether central banks will again sharply raise interest rates or, on the contrary, will continue to pursue more conservative strategies.

in Axios They also applied the same logic but in reverse: If the price of oil goes down, it will go down economic inflation. Adi Imcerovic is also from the Oxford Institute for Energy Studies (OIES). He stays on this ideaWe have high inflation, economies could go into recession and this is a situation that requires lower oil prices for a short period of time for the economy to recover.

And he asserts: “If central banks can no longer cut interest rates in the same way, OPEC + may be responsible Drag the entire global economy into a recession.” A few words from Imsrovic seem to endorse the theory of Amy Myers Jaffe, a professor at New York University, who maintains that if they cross the line, even Saudi Arabia will end up paying the price.

“There is a fine line of uncertainty. (…) You risk leading the world into an even greater financial crisis… as high oil prices exacerbate other destabilizing factors, and we see, Bingo, the collapse of everything, including oil prices, Amy Myers dry shoves in financial times.

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photo | Nathan Forbes