Barclays upgraded its 2022 oil price outlook as it projects a faster-than-anticipated inventory drawdown and wary supply action to offset a moderate surplus next year.
- The bank raised its 2022 average price outlook by $3 to hit $80 and $77 per barrel for Brent and West Texas Intermediate (WTI), respectively.
- Oil prices dropped on talk that the U.S., Japan, and India will withdraw reserves to control prices despite the threat of plunging demand as COVID-19 cases increased in Europe.
- Barclays forecast a smaller deficit in Q4 in 2021 to top the surplus sooner, in Q1-2021, rather than in Q2-2022.
- In a note, the bank stated that Strategic Petroleum Reserves are not a sustainable source of supply, and the impact of such market actions will only be temporary.
The United States is forecasted to announce a loan of crude oil from its emergency reserves in an effort to reduce energy prices.
CL1! Down -1.25%, USOIL down -0.92%Source: Reuters