Oil: Looser fundamental conditions make sky-high prices unsustainable next year – TDS
|Following a very strong year, the energy complex is set to disappoint many investors who believe that the crude oil bull market would run uninterrupted for the next twelve months. TD Securities projects that crude oil will moderate from cyclical highs as the coming year unfolds.
Supply rebound, demand normalization conspiring to force oil off highs
“Brent may still challenge $90/bbl over the next six months or so. After that, a convincing move below $80/bbl is very much in the cards in the latter part of the year.”
“The declining rate of demand growth for crude, which is expected to drop from 5.5 million bbls/d in 2021 to around 3 million bbls/d next year and just to above 1 million bbls/d in 2023, will be a key reason for the decline. But non-OPEC supply, which is projected to grow by as much as 3 million bbls/d, is another additional very important factor pulling prices lower, as is the fact that OPEC+ has some 5-6 million bbl/d of excess capacity to deploy to a looser market.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.