Kazakhstan’s commodity export prices forecast for 2023

Last year, Brent crude oil prices rose by an average of 7.7% compared to the previous one. In the spring, they rose to the level of $ 127.98 per barrel, reaching record levels over the past 14 years. According to experts, in 2023 prices will remain at relatively high levels, balancing between declining global growth and a reduction in supply.

Forbes Kazakhstan in January traditionally collected forecast data from international analytical institutes on the main export goods of the Republic of Kazakhstan for the coming year. The main source of information was the World Bank’s Commodity Market Outlook report, released in October 2022. Forecasts from the IMF, the Energy Information Administration of the US Department of Energy, the US Department of Agriculture, Fitch Ratings, Goldman Sachs, Bank of America, Barclays, JP Morgan, Morgan Stanley, ABN Amro and others were also used.

The World Bank expects an average Brent crude price of around $92 a barrel, below its previous forecast of $100. The decline is driven by expectations that oil consumption in 2023 will continue to grow by just under 2% as China gradually opens up and the transition from natural gas to oil continues, especially in electricity generation. The key downside risks to oil consumption are a sharper-than-expected slowdown in global growth and continued restrictions in China due to Covid. In addition, the bank expects that in the next few months, oil markets will tighten, as additional sanctions against Russia limit exports, the release of oil from strategic reserves in a number of countries is stopped, and OPEC+ members reduce production.

ANALYSTS OF THE IMF in their report World Economic Outlook predict the price of oil at $ 85.52 per barrel. They note that additional supply disruptions as a result of sanctions and war, as well as higher demand due to the transition from gas to oil, compensate for the risks of lower prices from a slowdown in the global economy, possible additional oil supplies from Iran and rising production in the United States. However, they emphasize that sanctions and possible retaliatory measures by Russia increase uncertainty and forecasts can be significantly revised.

The Energy Information Administration of the US Department of Energy predicts the price of Brent at $ 92.36 per barrel. The most optimistic forecast for Bank of America is $100. In his opinion, the growth will be due to the recovery of oil demand in China, combined with a reduction in supplies from Russia. Goldman Sachs has a forecast of $98 per barrel. The government of the Republic of Kazakhstan laid in the draft law on the republican budget for 2023-2025 a price of $ 85 per barrel (at the time of writing the article on December 27, it was $ 84.68).

An optimistic forecast for the price of gas for 2023 is given by the World Bank – $ 6.2 / MMBTU. The Energy Information Administration of the US Department of Energy expects the price at $ 3.51 (as of 27.12.2022 – $ 5,282 / MMBTU).

The most optimistic forecast for the price of gold from the Dutch bank ABN Amro is $ 1900 per ounce. Expectations of WB analysts are at the level of $ 1700. The most pessimistic forecast is given by Fitch Ratings – $ 1600 (as of 27.12.2022 – $ 1823.10).