Oil & Gas

15 Feb 2022

Barclays Raises 2022 Crude Oil Price Forecasts on Higher IEA Demand View

15 Feb 2022  by   
Barclays raised its crude oil price forecasts for 2022 on Monday, driven by a revision to demand estimates by the International Energy Agency (IEA) last week.

FILE PHOTO: A sticker reads crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019. Picture taken November 22, 2019. REUTERS/Angus Mordant

The bank lifted its 2022 price estimates by $7 to $92 a barrel for Brent and $89/bbl for WTI, respectively.

“The change is primarily driven by a significant revision to baseline demand estimates by the IEA, leading to a lower inventory cushion on a days of demand basis and reduced surplus expectations despite somewhat slower demand growth outlook and slightly higher U.S. output,” Barclays said in a note.

“The IEA revised up its baseline demand estimate by 800 kb/d last week, driven primarily by Saudi Arabia and China,” the bank said and added that this meant a tighter inventory situation and smaller surplus this year.

Oil prices surged over 2% on Monday to their highest in more than seven years as Ukraine’s president declared a “day of unity” for Feb. 16, a date that some Western media have cited as a possible start of a Russian invasion.[O/R]

“Key risks to our price outlook include a material supply disruption due to a significant escalation between Russia and Ukraine, which would exacerbate the concerns about spare capacity, and on the downside, a potential revival of the JCPOA (Joint Comprehensive Plan of Action) and faster-than-expected growth in U.S. oil output,” Barclays said.


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