Written by Alessandro Albano
Investing.com — Recent moves by WTI, which returned to its lowest levels in January after anti-Covid protests in China, has many investment firms revising their positions on the issue for the coming year.
According to JP Morgan (NYSE:), in 2023, “the gold market will remain rigid,” averaging $90 per barrel, with the OPEC+ variant which, just in case, could decide to intervene in the market by cutting production.
“The war in Russia – the investment bank explains – prompted us to raise our expectations for the average price of Brent crude in 2022 to $104 and in 2023 to $98, with a peak of $114 in the second quarter of 2002 (March 2022).”
However, they added from JPM, “We now expect the 2023 average price to be $8 lower, based on a return of Russian production to pre-war levels by mid-2023.”
Overall, Jamie Dimon’s bank expects Brent crude to average “$90 per barrel in 2023 and $98 per barrel in 2024”.
However, a different view comes from competitor Goldman Sachs (NYSE:). In an interview with CNBC at Goldman Sachs’ Carbonomics conference in London, Jeff Currie, global head of commodities at Goldman Sachs warned of three major risks affecting the global market.
Dollar first. The second factor, Currie said, adding that the second factor is “Covid and China, which are worth more than the November OPEC cuts,” while the third factor “is Russia that is pushing barrels in the market now, ahead of the December 5 deadline set in the Western embargo.”
However, according to the GS director, the prospects for 2023 are “extremely positive”, which is why “the bank remains true to its positions with a forecast of $110 per barrel for Brent next year.”
“Demand is going south again in China given what’s been going on. I think the main issue for China right now is the risk of forced reopening. That means, on the flip side, there will be ‘self-imposed’ lockdowns where people don’t want to get on trains, and you won’t want to.” in going to work, and demand will drop further.”
For this reason, according to Currie, OPEC will have to debate whether to accept further weakness in demand in China or continue to propose supply cuts.
He later explained, “I think there is a good possibility that we will see a decline in production.”