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By Adedapo Adesanya

British financial institution Barclays on Monday raised its Brent price forecast from $11 to $111 a barrel for 2022, citing a larger and longer-lasting disruption to Russian supply following European Union (EU) sanctions. .

He also raised the benchmark price for the year 2023 by $23 a barrel, as he sees Brent prices averaging $111 this year and next, while he sees the US West Texas Intermediate (WTI) to $108 for the same period.

Russian oil production is expected to fall by 1.5 million barrels per day by the end of the year, Barclays said, adding that it no longer expects inventories to normalize over the course of the year. forecast period.

“Limited spare capacity and limited U.S. supply growth mean inventories are likely to remain tight over our forecast horizon unless demand slows significantly due to contagion effects,” said the bank in a note.

Business post announced that EU leaders had agreed last week to cut Russian oil imports by 90% by the end of the year.

The sanctions will also prevent operators within the EU from financing or transporting Russian oil to third countries.

“This will make it particularly difficult for Russia to continue exporting its crude oil and petroleum products to the rest of the world, as EU operators are important providers of these services,” the European Council said in a statement. .

European Council President Ursula von der Leyen proposed the ban in May after the United States, which is less dependent on Russian oil, announced a similar embargo.

Europe was the destination of almost half of Russia’s exports of crude oil and petroleum products before the Russian invasion of Ukraine, according to the International Energy Agency (IEA).

Citi Research also raised its quarterly oil price forecast for this year and its average annual outlook for 2023 on Monday, noting that any additional supplies from Iran appeared to be heavily delayed.

Citing tighter market balances, Citi raised its Brent price forecast for the second quarter of 2022 by $14 to $113 a barrel, and third and fourth quarter prices by $12, to $99 and $85, respectively.

The bank estimates Brent to average $75 a barrel in 2023, revised up by $16.

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Elaine R. Knight