The Bank of America has revealed its outlook for the global oil market. The forecast for the next year has proven pretty pessimistic. Analysts believe that crude prices are increasingly at risk from sharp swings amid demand pessimism and constrained supply.
The coming year is expected to be challenging for the oil market. It will face big issues around both energy demand and its supply, the Bank of America estimates. The report says that the global oil market will experience an “unstable equilibrium” that can be easily broken by any major player. The industry will come under strong pressure from a looming recession in the global economy. Against this background, oil prices are likely to fluctuate wildly in 2023. According to the Bank of America, world energy demand is projected to decline to 1.55 million barrels per day next year, but this will not prevent further gains in quotes. Experts predict that the price of crude oil will average $100 per barrel in 2023.
There are fears that Russia could cut oil production in response to the price cap imposed by the West. After all, President Vladimir Putin has repeatedly warned of such a scenario, adding that Moscow will not sell oil to those countries that have joined the initiative.
According to Putin, Russia has a production agreement with the OPEC+ group of oil producers, but the government may still consider a possible reduction in output if necessary. However, no final decision on this issue has been made yet.
