Bank of America expects Brent to average $100 and WTI to average $94 in 2023 amid a drag in demand growth from recession.
The American multinational investment bank wrote in its research stating that Brent prices rose steadily in 2022 as the global economy recovered from Covid-19, averaging around $101/bbl with the lower end of the range at $78 in January and peaked at $128 in early March following the war outbreak between Russia and Ukraine.
Due to higher energy prices, limited supplies and slower global GDP growth, BofA’s global oil demand growth was cut short from its projection for 3.6 million barrels per day in 2022 to just 1.9 million.
In 2023, BofA expected recession to further drag demand and prices lower, but its baseline demand growth projections is 1.55 million barrels per day as Asia including China reopens post-pandemic. The firm forecast Brent and West Texas Intermediate to average $100 and $94, respectively in 2023 with Brent spiking to $110 by 2H23.