The World Bank in its latest commodity outlooks report has projected that oil prices will likely experience a decline from now till 2024.
The report forecast that the benchmark oil price, Brent crude, could drop from $120 per barrel in June to $90 per barrel in September and that the price of Brent crude oil may also average $92 per barrel in 2023 and $80 per barrel in 2024.
The World Bank said global growth has decelerated and is expected to slow further in 2023, due to synchronous policy tightening, worsening financial conditions, and declining confidence.
It further pointed out that additional negative shocks such as higher inflation or financial stress, could push the global economy into a recession.
Global recessions have been associated with large declines in oil consumption in the past, although the severity is always varied. The largest decline in oil consumption occurred in the 1980s, with consumption falling for four consecutive years.
The report listed a number of factors as responsible for the sharp decline in oil prices from February to September 2022 including the Russia-Ukraine war, decreased oil production, and deceleration in oil consumption growth among others.
