ASTANA – The Kazakh National Bank’s November monetary policy report predicts that oil prices would decrease to $70 per barrel in the medium term owing to a global oil market imbalance.
Under the baseline scenario, it is expected that in 2024 oil prices will stabilize at nearly $80.3 per barrel on average per year. Photo credit: Shutterstock
“The situation in the oil market has worsened: demand from China is decreasing, and supply is expected to increase. As a result, estimates for the price of Brent crude oil for the baseline scenario have been reduced to $70 per barrel by the end of the forecast period,” reads the report released on Dec. 9.
Under the baseline scenario, it is expected that in 2024 oil prices will stabilize at nearly $80.3 per barrel on average per year.
“In 2025-2026, the price of oil will be $70 per barrel. Weaker demand from China and OECD countries is expected, as well as lower global economic growth in 2025 than previously forecast. The easing of restrictions on oil production by OPEC+ countries from the beginning of 2025 and an increase in production in the countries of the North and South Americas will contribute to a supply surplus in the oil market,” the report notes.
Last week, OPEC+ member countries agreed to extend the agreement on oil production cuts until 2026.
According to the report, the increase in world prices in September-October covered almost all major food categories, including cereals. Grain prices increased by 3.9% during this period, but in October, prices remained below the level of the same period last year by 8.3%.
The main drivers of the price increase were adverse weather conditions that impede the sowing of winter crops in key exporting countries (European Union, Russia, and the United States), as well as a reduction in the volume of corn harvest. According to the forecast estimates, the current growth trajectory will continue until the end of the forecast horizon. The expected dynamics of world grain prices is due to an increased imbalance between supply and demand.
