Thailand
Thailand – PTT: Oil at $90 in 2023
Global crude oil prices are expected to keep decreasing to US$85-95 a barrel next year when the world economy slows down, according to analysts of national oil and gas conglomerate PTT Plc.
The price range, which is based on the Dubai reference price, remains high compared with an average price of $99 this year and $60-70 previously, said the analysts.
The estimate comes as the World Bank warned of a global recession in 2023 after central banks raised interest rates in response to high inflation.
“Oil supply will slightly exceed demand next year, but global oil prices still fluctuate and can go up anytime if supply is disrupted again,” said Nitipat Saengdaochai of PTT Prism during the 11th annual petroleum outlook forum.
PTT Prism is a unit under PTT Group comprised of experts across PTT energy businesses.
In the second quarter this year, the global oil price soared past copy00 a barrel following concern over oil supply disruptions as a result of the Russia-Ukraine war.
“The oil market appeared to overreact to the war,” said PTT Prism analyst Sirawish Somrattanakul.
He said the market initially believed the conflict would lead to an oil supply loss of 3-4 million barrels per day (MBD), around 4% of the global oil supply, from Russia. This caused Opec, non-Opec countries and the US Strategic Petroleum Reserve to increase supply by around 5.4 MBD.
Russia, the second-largest oil exporter after Saudi Arabia, did not decrease its shipments. Facing sanctions on its petroleum exports from the US and its allies, Russia exported more oil to India and China.
The result was global oil prices decreased, though they remain at a high level, currently around $90 a barrel, partially because of high transport costs for delivery to India and China, said Mr Sirawish.
Analysts are monitoring the reaction when the EU bans seaborne imports of Russian crude oil from Dec 5, and bans petroleum product imports from Feb 5, 2023.
Demand for oil is expected to grow by 1.8% next year, compared with 2.2% this year. According to an estimate by the International Monetary Fund (IMF), global GDP is projected to grow by 2.7% year-on-year, said Mr Nitipat.
“The global economy in 2023 may continue to grow, but at a slower pace than the 30-year average of 3.4%,” he said.
The IMF projects global economic growth of 3.2% this year, downgraded from 3.9% following the Russia-Ukraine war.
PTT Prism expects lower global oil prices next year, but Mr Nitipat cautioned that “we live in a world with uncertainties and unprecedented events”.
Source: https://www.bangkokpost.com/business/2444970/ptt-oil-at-90-in-2023