"Nice bump in barrels.... forecast prices seem somewhat non-conservative." -P
That is quite the bump in forecast crude oil prices to January 2023 from a year earlier.
US-lead NATO country sanctions against Russia are not enough to justify the bump in my opinion. There was already some talk of the US going into recession in January 2022 but both the 2-10year and 2month-10year yield curves had not yet inverted. Now, there is significant talk of global recession.
I buy the oil supply structural deficit narrative but let's not get carried away which is a nice way of saying let us not forget global aggregate demand.
That forecast oil prices are flat or trend lower over the first 6 years almost looks like a redeeming feature except please do recall how the discounting puts the greatest weight on the first couple of years.
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Six Year Crude Oil Price Forecast - NSAI Report
Year-End Forecast: | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 6 Yr Avg |
Brent (USD$/bbl) - January 1, 2023 | $84.67 | $82.69 | $81.03 | $81.39 | $82.65 | $84.29 | $82.79 |
Brent (USD$/bbl) - January 1, 2022 | $71.46 | $69.62 | $71.01 | $72.44 | $73.88 | $75.36 | $72.30 |
The oil price projections used by NSAI are based upon an average of December 31, 2022 and 2021 forecasts of Brent Crude futures prices prepared by three qualified reserves evaluators: GLJ Petroleum Consultants Ltd., McDaniel & Associates Consultants Ltd. and Sproule Associates Limited. The six year average for the NSAI Report reflects an average Brent oil price of $82.79, which as at the time of this press release, is approximately $4/bbl lower than current market Brent prices.
