Strategists at Société Générale update their Crude Oil price forecasts. They expect the black gold to remain elevated in the first half of next year before declining towards $93.50 in the last quarter of 2023.

Oil market looks set to remain in deficit every quarter until the end of Q4 '23

“According to our models, the market looks set to remain in deficit every quarter until the end of Q4 '23, pulling yet more Oil from inventories.”

“We forecast Oil prices to average $98/bbl in Q1 '23 and $108/bbl in Q2 '23, with the China reopening/Russian sanctions kicking in. For the second half of 2023, we forecast a decline in Oil prices, implying an average of $93.5/bbl in Q4 '23. This view assumes fading risk premium due to Russian sanctions, a slowdown in economic activity due to a recession in the US and China reopening proving choppy and probably gradual.”

“In 2024 and 2025, we expect prices to rise back toward $100/bbl and $110/bbl respectively, as inventories would still be very low and significant backwardation re-emerges.”