Barclays said on Tuesday it remained “constructive” on oil prices, but cautioned that a worsening in global manufacturing activity could pose a downside risk to its current $98 per barrel Brent price forecast for 2023.

“Given the challenging macroeconomic backdrop (we) highlight $15-25/barrel of downside to our forecast if the slump in global manufacturing activity worsens similar to the 2008-09 episode” and “would imply 1-2 million barrels per day downside to our demand estimates,” the bank said in a note.

The global benchmark Brent crude was trading at around $79.80 a barrel on Tuesday.

“The cyclical demand trends are pointing south for oil, but the structural trends on the supply side – slowing U.S. output growth, a proactive OPEC+ and the effect of sanctions on Russian supplies – have kept prices supported significantly above pre-COVID-19 levels,” the bank said.

The bank estimates a decline of 700,000 barrels per day Q4-to-Q4 in Russia’s liquids output in 2023.
Source: Reuters