Oil to trade at $80 by mid-year, rising to $90 by end-2023 –Commerzbank

At the beginning of the week, crude oil was cheaper than it was last 15 months ago. Strategists at Commerzbank have lowered their oil price forecast. However, they still expect the oil price to rise in the course of this year.

Oil market to be significantly undersupplied in the second half of the year

“Even if the market turmoil subsides, the higher risk aversion sparked by it is likely to ease only gradually. Together with the fundamental data, which are unlikely to be as supportive, this suggests that the oil price will be lower in the months ahead than we have previously expected.”

“On the other hand, OPEC+ is unlikely to stand by and watch a further decline in the oil price, but rather reduce supply if necessary, which argues against a further decline in the oil price.”

“We are lowering our oil price forecast for mid-year to $80 per barrel (previously $95), which would still be higher than current levels.”

“We are sticking to our general view that the price of oil will rise. If the market stabilizes, the US government can be expected to buy oil to replenish its strategic reserves. In addition, the oil market is likely to be significantly undersupplied in the second half of the year due to a strong increase in demand, especially in China, and stagnating supply. We expect that the oil price will rise to $90 per barrel by the end of the year (previously $100).”