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Cautious production policy from the OPEC+ group next year is expected to keep oil prices above $70, with Brent Crude expected to average $75.33 a barrel in 2022, the monthly Reuters poll showed on Tuesday.
The average price that 39 economists and analysts predicted in the November poll, which started before Friday’s price plunge due to Omicron fears, is now the highest for 2022 the experts have forecast for Brent and for WTI this year.
The U.S. benchmark is expected to average $73.31 per barrel next year, up from $71.21 a barrel expected in the October poll.
The average WTI Crude price for this year is forecast at $68.52, according to the November poll.
The analysts surveyed by Reuters expect OPEC+ to continue keeping a cautious approach to releasing more supply to the market. The group, however, is not expected to allow oil prices to stay above $80 for a sustained period of time because it is also worried about U.S. shale gathering momentum if prices remain that high, John Paisie, president of Stratas Advisors, told Reuters.
Oil prices have dipped since Friday, and early on Tuesday, they were trading very close to the average forecast in the Reuters poll for 2021, which is $71.25 a barrel Brent and $68.52 per barrel WTI.
OPEC+ is meeting on Thursday to decide how to proceed with production for January in view of an expected market surplus next year and the new Omicron variant, which has had all markets, including the oil market, fretting about the consequences on economies and oil demand in case additional restrictions and lockdowns are imposed.
Many countries have already banned flights from South Africa and other southern African countries, while several—including Japan and Israel—closed off borders for foreign visitors. Others have tightened requirements for testing and self-isolation upon arrival regardless of vaccination status, which could also reduce international travel in the coming weeks.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.