Barclays on Monday raised its Brent crude price forecasts by $11 per barrel for 2022 and $23 for 2023, citing a larger and sustained disruption in Russian supply following sanctions by the European Union.
The British bank sees Brent prices averaging $111 this year and next, while it sees U.S. West Texas Intermediate (WTI) at $108 for the same period.
On Monday benchmark Brent crude futures were trading around $120 a barrel, while WTI futures stood at $119.
Russian oil output is expected to decline by 1.5 million barrels per day (bpd) by the end of the year, Barclays said, adding it no longer expects inventories to normalise over the forecast period.
“Limited spare capacity and constrained U.S. supply growth, mean inventories are likely to remain tight over our forecast horizon, barring a significant slowdown in demand due to spillover effects,” the bank said in a note.
EU leaders last week agreed to cut oil imports from Russia by 90% by the end of the year.
Europe was the destination for nearly half of Russia’s crude and petroleum product exports before Russia’s invasion of Ukraine, according to the International Energy Agency (IEA).
Citi Research on Monday raised its quarterly oil price forecasts for this year and its year-average outlook for 2023, noting any additional supply from Iran looked heavily delayed.