Yahoo Finance Investment banks divided on oil prices in 2023: GS sees Brent at $110, JPM more pessimistic
By Alessandro Albano
Investing.com - The recent performance in Brent and WTI, which returned to January lows after anti-COVID protests in China, has led various investment houses to revise their positions in this regard for next year.
According to JPMorgan, in 2023 the gold market will "remain tight," averaging $90 a barrel, with the OPEC+ variant possibly deciding to intervene in the market by cutting production.
"The war in Russia," explained the investment bank, "has prompted us to raise our forecasts for the average Brent price in 2022 to $104 and in 2023 to $98, peaking at $114 in the second quarter of 2022 (March 2022).
However, JPM added, "we now forecast a 2023 average price of $8 lower on the basis that Russian production will normalize to pre-war levels by mid-2023."
Overall, Jamie Dimon's bank expects Brent to average "$90/bbl in 2023 and $98/bbl in 2024."
A different view, however, came from competitor Goldman Sachs. Interviewed by CNBC at Goldman Sachs' Carbonomics conference in London, Jeff Currie, global head of commodities at Goldman Sachs warned of the three main risks weighing on oil.
"First is the dollar." said Currie, adding as a second factor "the COVID and China being worth more than the OPEC cuts for the month of November," while the third factor "is Russia pushing barrels into the market right now, ahead of the Dec. 5 deadline under the Western embargo."
However, according to Currie, the outlook for 2023 "is very positive," which is why the bank "is sticking to its positions with a forecast of $110 per barrel Brent for next year."
"Demand is heading south again in China, given what's going on. I think the key issue in China right now is the risk of a forced reopening. That means there will be 'self-imposed' closures where people won't want to get on trains, won't want to go to work, and demand will drop further downward."
Therefore, according to Currie, OPEC will have to discuss whether to "accept further demand weakness in China or continue to propose supply cuts."
"I think there is a high probability that we will see a reduction in production," he later clarified.
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