Brent Crude is trading at a similar level to the start of the year, around $85. But economists at UBS believe that the tightening of the oil market this year will eventually put prices on an upward trajectory.

Oil price recovery to gain traction as Russia cuts output

“We expect Russian crude production to fall below 9 million barrels per day in 2023 from levels above 10 mbpd at the start of 2022 and 9.77 mbpd in December.”

“We believe two-thirds of growth in oil demand this year will come from emerging Asia, led by China’s reopening – which we think will lift global oil demand to above 103 mbpd in the second half of the year.”

“We expect non-OPEC+ nations to provide only modest supply growth this year, adding 1.3 mbpd primarily from US oil production, but trailing oil demand growth of 1.6 mbpd this year.”

“We maintain our positive outlook on oil as we continue to expect Brent to rise to $110 and WTI to $107 this year.”