© Reuters. FILE PHOTO: The Barclays logo is seen in front of displayed stock graph in this illustration taken June 21, 2017. REUTERS/Dado Ruvic/Illustration/File Photo
(Reuters) – Barclays (LON:) raised its 2022 oil price forecasts on Tuesday as it expects a faster-than-expected inventory drawdown and cautious supply response to offset a modest surplus next year.
The bank raised its 2022 average price forecast by $3 to $80 and $77 per barrel for and West Texas Intermediate (WTI) respectively.
Oil prices fell on Tuesday on talk that the United States, Japan and India will release crude reserves to tame prices despite the threat of faltering demand as COVID-19 cases flare up in Europe.
Barclays expects a smaller deficit in Q4-21 to flip to a surplus a bit sooner, in Q1-22, compared with Q2-22 earlier, but said a lower starting point for potential inventory builds next year should more than offset this.
“We think Strategic Petroleum Reserves are not a sustainable source of supply and the effect of such market intervention would only be temporary,” the bank said in a note.
The United States is expected to announce a loan of from its emergency stockpile on Tuesday in an attempt to lower energy prices, a Biden administration source familiar with the situation said.
Barclays said a persistent COVID-19 surge posed significant risks to its outlook as it could weigh on demand, even though OPEC+ would likely slow or even pause its ongoing tapering of supply curbs in response to a material slowdown in demand.
The Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+ earlier this month agreed to stick to plans to raise oil output by 400,000 barrels per day (bpd) from December.
Disclaimer: Fusion Media
would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.