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One of the most significant price slumps oil has ever recorded was in 2020 when crude oil slumped to $0 per barrel in the heat of the coronavirus lockdowns.
Dear readers, welcome to another episode of the Coinspeaker Advent Calendar where we will look at some definitive forecasts for oil price in 2023.
Crude Oil is a very vital natural resource that is almost indispensable for every country. While it does not fall under renewable energy options for powering industries, transportation, and homes, the economics surrounding it has continued to gain relevance as the bulk of energy options depends on it.
The government is directly at the heart of the control of Oil Prices and there are oil-producing nations that formed the oversight body, the Organization of Petroleum Exporting Countries (OPEC). OPEC and its allied countries known as OPEC+ forms the rules that determine the production amounts, and indirectly the pegged price of this product.
While it may not necessarily impact your bottom line as an investor, the rise and fall of oil prices can significantly impact individual well-being as well as the bottom line of those who need crude oil products for their businesses. Knowing the projected price of oil in 2023 can help everyone plan effectively and minimize any potential impact of a price upswing.
Oil Price Respond to Economic Policies
Oil is not as volatile as the digital currencies that we have analyzed in the course of this Advent Calendar series, however, its rise and fall can be very profound should the economic and monetary policies stay unfavorable.
One of the most significant price slumps oil has ever recorded was in 2020 when crude oil slumped to $0 per barrel in the heat of the coronavirus lockdowns. With most oil-producing countries churning out oil over a certain period with a considerably slashed demand across the board, the value of the oil dipped, and investors who might have placed a bet on oil recorded significant losses at the time.
Year after year, the global economy faces at least one encompassing economic strain that fuels the growth or fall of oil. This year, it was the Russia-Ukraine war. This war stirred energy crises that recorded a major upsurge in the price of Oil as reported by Coinspeaker.
Expectations on Oil Prices in 2023
According to data from Oilprice.com, the international oil benchmark, Brent Crude is currently priced at $78.02, while the West Texas Intermediate (WTI) is pegged at $72.69. The OPEC Basket has an average price of $79.77, significantly surpassing other notable benchmarks.
Based on the boom the oil sector recorded this year, the US Energy Information Administration (EIA) has pegged the average price of Brent Crude oil for 2022 to be $102.13 while that of WTI to be $95.88 per barrel this year. Per the consensus estimate, these prices are bound to dip next with Brent Crude slipping to $95.33 per barrel and WTI averaging $89.33 per barrel.
That prices will be reduced next year based on this projection should not be cause for rejoicing as the energy strain will still be a major headwind that every government and oil product user will have to deal with in their own way.
We hope that this heads-up has given you an insight into what to expect per Energy and oil prices in the coming year. Please stay tuned as we bring another exciting piece of content your way tomorrow.