West Texas Intermediate (WTI) crude has simmered down just below $100/bbl in recent days. Price volatility is a development that participants will have to learn to cope with for the foreseeable future, according to strategists at the Bank of Montreal, who forecast WTI at $100 and $85 in 2022 and 2023, respectively.

More volatility in store

“Crude oil prices will likely remain extremely volatile until we have a better idea of how the war is going to conclude. For now, our baseline view is that the conflict is going to drag on in the coming months and that official sanctions and self-sanctioning are likely to remain more or less the same.”

“We are comfortable with our current forecast for WTI crude to average $100/bbl in 2022 and $85 in 2023. The lower projection for next year essentially reflects the view that the oil market will become somewhat more balanced due largely to increased supply.”