Market concerns about a recession are growing, and New York crude oil prices fell into a bear market on Wednesday (6th). Many analysts said that the sell-off in oil prices was overdone. With Russian crude oil production falling, oil prices may remain high, but some analysts believe that , oil prices could fall to $55 a barrel by the end of the year if demand slumps but Russian oil production is unexpectedly high.
Due to growing concerns about global economic growth, the US dollar index rose above 107 to a new 20-year high, which also put pressure on the US dollar-denominated crude oil market. WTI crude oil prices closed at $98.53 a barrel on Wednesday, falling into a technical bear market. Down more than 20% from its recent high, Brent crude futures fell 2% to settle at $100.69 a barrel.
Goldman Sachs and other four top Wall Street analysts predict the future trend of crude oil. The Goldman Sachs team, led by Damien Courvalin, said the sell-off in oil prices had been overdone and demand remained strong for suppliers to cope with, especially given the low level of global oil inventories and it was too early to succumb to recession fears.
Goldman Sachs expects WTI crude to hit $125 a barrel within six months and Brent to $130 a barrel.
Deutsche Bank analyst James Hubbard believes the EU is planning a near-total ban on Russian oil imports, which could cut purchases by 90% by the end of the year. At the same time, the G7 is exploring plans to limit Russian oil prices, both of which would mean lower Russian output.
Markets reported Wednesday that the United States and its allies are discussing capping Russian oil prices between $40 and $60 a barrel.
With the prospect of tougher Western sanctions on Russian oil exports, the global crude oil supply-demand balance is expected to tighten in the coming quarters, with WTI forecast at $107 a barrel by the end of the year and Brent at $110 a barrel, Hubbard said.
Louise Dickson, a senior analyst at Rystad Energy in Norway, took a slightly different view. Dickson said inflation and central bank intervention had heightened fears of a recession and that if the economy did head toward a recession, oil prices would almost certainly fall. .
Dickson estimates that international oil prices could fall to $55 a barrel by the end of 2022 if demand falls sharply but Russian oil supplies remain stable
However, analysts at Dutch investment bank ING said after the sell-off in oil prices: “Fundamentally, little will change.”
“Given that the market is expected to remain tight given that Russian oil supplies are expected to decline this year, we expect the market’s further downside to be quite limited,” the analysts said.
