UBS Lowers 2023 Brent Forecast By $8/bbl to $81/bbl

UBS lowered its Brent oil price forecast for this year and next year with Brent prices now averaging $81/bbl in 2023, down by $8/bbl from previous estimates from earlier this month, the bank said in a note.

• "Brent down to $80/bbl from $90/bbl for 3Q23 and $85/bbl from $90/bbl for 4Q23, bringing the 2023 average price to $81/bbl from $88/bbl, and 2024 down to $80/bbl from $85/bbl," the investment bank wrote.
• "We reiterate our forecasts for later years: $80/bbl in 2025 and $75/bbl from 2026.”
• The bank argues, while oil demand concerns persists, this downside revision is due to the upside of supply. UBS raised crude supply forecasts from Iran, Venezuela and Mexico for next year.
• “Persisting demand concerns associated with slower economic growth and positioning have also played a role in recent price weakness…We expect oil prices to rally from current levels in 2H23 as we continue to forecast a material supply deficit of nearly 2Mb/d over the period and see inventory draws as likely to support prices", the bank wrote.