Following OPEC’s decision to cut production, Brent crude oil looks well supported at $80/bbl. ANZ Bank economists expect oil prices to exceed $100/bbl in the third quarter of 2023.
OPEC’s production cut will continue to support the oil market
“OPEC’s surprise move could increase the implicit deficit of the oil market up to 2 mb/d in the coming months. This is likely to reverse the recent weakness in oil prices, raising prices during the northern hemisphere summer“.
“Tightness expectations had already been rising amid China’s reopening, although that was tempered by the uncertain macroeconomic background. At the very least, this measure protects the market against such risks. Besides, sends a strong message to the market that OPEC is willing to defend a floor price above $80 per barrel. And he does it knowing that there will probably be little response from other producers. US supply growth remains subdued and other fringe suppliers have limited spare capacity.”
“Now we expect Brent crude to top $100/bbl early in the third quarter of 2023 and likely to stay around that level by the end of the year.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
