The European Union expects that the average price of Brent crude this year will be $84.8 per barrel, follows from the winter forecast (.pdf) European Commission. In autumn, the EU expected Brent at $85 per barrel in 2023.
According to the report, the EU predicts that in 2024 the price per barrel of Brent oil will be $79.9, in autumn its cost in 2024 was estimated at $78. The winter forecast says that the embargo on offshore crude oil supplies to the EU, as well as the established price ceiling, did not lead to additional tension in the international crude oil market.
Analysts of the European Commission believe that the embargo on oil products from Russia and the price ceiling that came into force on February 5 will not lead in the short term to the shortage of diesel fuel expected by some analysts in the EU. The deficit will be avoided thanks to a surge in imports at the end of 2022 and a high level of stocks, the forecast notes.
From December 5, the oil price ceiling at $60 per barrel came into force, from February 5 – for oil products from Russia at $100 and $45 per barrel (for products that are traded at a premium and a discount to oil, respectively). In early January, the cost of Brent was declining, after which world oil prices began to grow. Bank of America predicted that the price of Brent oil in 2023 would rise to an average of $100 per barrel.
On February 10, Deputy Prime Minister Alexander Novak announced that Russia would voluntarily cut oil production by 500,000 barrels per day in March. After that, the cost of April futures for Brent on the London Stock Exchange rose by 2.5% to almost $87 per barrel. As of today, February 13, the price of April futures is again reduced by 1.32% and is $85.2 per barrel.
For more information on how Russia’s decision to reduce oil production will affect world markets, read the material “Kommersant FM” “Oil maneuvers”.