Kazakhstan expects oil prices to fall

Kazakhstan expects a gradual fall in Brent oil prices in the coming years, Azernews reports.

According to the report of the National Bank of Kazakhstan (NBK) on monetary policy for 2024-2026, estimates for the global price of Brent oil were revised downward due to increased oil supply from countries outside OPEC+.

NBK expected that from the beginning of this year, oil prices will be set at $80 per barrel. This will be facilitated by the extension of the agreement to reduce oil production between Saudi Arabia and other OPEC+ countries by 2.2 million barrels during the first quarter of 2024.

As the NBK noted, this will lead to the formation of a slight oil shortage on the world market in the first quarter of 2024. From the beginning of 2026, there will be a gradual decline in oil prices due to the expected increase in oil production by countries outside OPEC+ and forecasts for more moderate development of the global economy

The base case scenario assumes that the Brent oil price will remain at $80 per barrel until the end of 2025 and then gradually decline to $75 per barrel by the end of 2026.

At the same time, due to the uncertainty of the development of the world economy, in addition to the base scenario, alternative scenarios for the dynamics of the world oil price were also considered.

Thus, within the framework of the optimistic scenario, it is assumed that the world oil price will rise to $100 per barrel in September of this year and remain at this level until the end of the forecast period.

In addition to this, in the case of weaker global oil demand, a pessimistic scenario is considered, which assumes a decrease in the world price of Brent oil to $60 per barrel in September of this year and remaining at this level until the end of 2026.