International crude oil prices can drop to around 65 dollars per barrel by the end of 2022 due to expected economic slowdown in the wake of record high prices of commodities.
Meanwhile, by the end of 2023 the global oil prices could sink to as low as 45 dollars/barrel because the world is set to face a recession that would crash fuel demand.
The Citibank has predicted this expected development in its latest forecast. The US bank said that the assumptions for this forecast include a global recession, a lack of intervention by OPEC+ or some of its members to boost supply, and a drop in oil investments.
“For oil, the historical evidence suggests that oil demand goes negative only in the worst global recessions,” Citi analysts including Ed Morse and Francesco Martoccia wrote in the note. “But oil prices fall in all recessions to roughly the marginal cost,” the bank says. On Wednesday morning, Brent prices dropped below $105 a barrel after hitting $126/barrel a few weeks ago.
