Moody’s increases oil price forecast in 2022

15:33 - 7.10.2021


October 7, Fineko/abc.az. Moody’s Investors Service has increased its medium-term oil price range for 2022 to $50-70/barrel.

ABC.AZ reports that this is reflected in the rating agency’s forecast saying that the full cost of production of a marginal barrel of oil will keep increasing in step with a continued recovery in demand.

The agency also expects that the prime cost of production will grow along with the growth of demand in 2022-2023.

Moody’s analysts say that the upstream energy sector continues to invest well below pre-pandemic levels despite the sharp turnaround in oil and natural gas prices in 2021.

“Our analysis demonstrates that upstream companies will need to increase their spending considerably for the medium term to fully replace reserves and avoid declines in future production,” informs Moody’s.

In May, Moody’s forecasted the average price of Brent crude oil at $58 per barrel for 2021, and $53 per barrel for 2022.

 

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