Barclays raises 2022 oil price view on faster inventory drawdown

Barclays raises 2022 oil price view on faster inventory drawdown
Barclays raises 2022 oil price view on faster inventory drawdown   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p> – Barclays raised its 2022 oil price forecasts on Tuesday as it expects a faster-than-expected inventory drawdown and cautious supply response to offset a modest surplus next year.</p> <p>The bank raised its 2022 average price forecast by $3 to $80 and $77 per barrel for Brent and West Texas Intermediate (<span class="caps">WTI</span>) respectively. </p> <p>Oil prices fell on Tuesday on talk that the United States, Japan and India will release crude reserves to tame prices despite the threat of faltering demand as <span class="caps">COVID</span>-19 cases flare up in Europe.</p> <p>Barclays expects a smaller deficit in Q4-21 to flip to a surplus a bit sooner, in Q1-22, compared with Q2-22 earlier, but said a lower starting point for potential inventory builds next year should more than offset this. </p> <p>“We think Strategic Petroleum Reserves are not a sustainable source of supply and the effect of such market intervention would only be temporary,” the bank said in a note. </p> <p>The United States is expected to announce a loan of crude oil from its emergency stockpile on Tuesday in an attempt to lower energy prices, a Biden administration source familiar with the situation said. </p> <p>Barclays said a persistent <span class="caps">COVID</span>-19 surge posed significant risks to its outlook as it could weigh on demand, even though <span class="caps">OPEC</span>+ would likely slow or even pause its ongoing tapering of supply curbs in response to a material slowdown in demand. </p> <p>The Organization of the Petroleum Exporting Countries and its allies, collectively known as <span class="caps">OPEC</span>+ earlier this month agreed to stick to plans to raise oil output by 400,000 barrels per day (bpd) from December.</p> <p/> </div>