Barclays revisited its number for the price prediction of crude oil, as they expect a quicker than anticipated consumption of the inventory, and a controlled production being opted for, as crude oil’s surplus is forecasted next year.
The bank revised its forecast by $3, to $80 a barrel for Brent, and $77 per barrel for West Texas Intermediate (WTI). Oil prices witnessed a decline on Tuesday when the U.S., Japan, and India were speculated to release crude oil reserves, to control the soaring prices and bring them under control.
Even as covid-19 cases continue to climb up in Europe, the demand shall be fluctuating, in the wake of newer restrictions, yet there is no respite from the production end in the prices of the commodity.
Barclays estimates a smaller deficit in Q4-21, which shall be converted into a surplus in the first quarter of 2022. They said in a note, “We think Strategic Petroleum Reserves are not a sustainable source of supply and the effect of such market intervention would only be temporary.”
The federal government has to scratch its head, to make a harmonious call between reviving the economy and keeping inflation in check, and controlling its expenses at the same time. They shall most likely be releasing a chunk of its requirements from its own reserve of an emergency stockpile of crude oil to bring the prices under control.
The Oil producing economies, and their conglomerate, have decided that they would only be increasing output from December and reaching 400,000 barrels per day.