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Pundits See Rising Prices But Recession Risk Looms

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Tension between physical supply shortages and recession fears could send oil prices on a roller coaster for the rest of this year. A survey of price forecasts shows pundits believe oil prices will climb from current levels through the third quarter before dipping in the fourth. Energy Intelligence sees a similar trend, with Brent forecast to trade at $108.50 in the third quarter but fall to $93 in the fourth. Near term, supply worries on multiple fronts are driving bullish sentiment. Western efforts to isolate Russia following its invasion of Ukraine present the biggest upside risk. But recession worries loom by year's end. The EU has pledged to halt purchases of seaborne Russian crude by December and products by February. The US and Canada have already stopped their much smaller imports. Refiners are now scrambling to find replacement barrels, providing support for prices. Traders and brokers say an EU ban on insuring and financing tankers carrying Russian oil will further — albeit artificially — tighten the market. Such transport bottlenecks could severely limit Russia’s ability to export some 3 million barrels per day of crude and 2 million b/d of products.

Topics:
Oil Forecasts, Oil Prices
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