Brent will average about $75 next year – OCBC

Brent oil prices are off to a volatile start to the fourth quarter. OCBC Bank economists analyze the outlook for oil prices.

Oil prices will average $90 in the fourth quarter of 2023 and $88 in the second half of 2023

Our view remains that global oil prices will average $90 in the fourth quarter of 2023 and $88 in the second half of 2023, following a volatile start to the fourth quarter of 2023.

Despite the developments between Israel and Hamas, our fundamental view is that supply shortages will persist in the global oil market in the fourth quarter of 2023, following the extension of additional voluntary restrictions by Saudi Arabia and Russia until the end of year. This will more than offset concerns about demand, as growth in China remains lackluster and sticky inflation keeps global central banks, including the Fed, on a hawkish stance.

In our view, increasing recession risks in 2024 in the US will weigh on global growth prospects and put downward pressure on global oil prices. Therefore, we expect Brent to average $75 next year.

Source: Fx Street

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