West Texas Intermediate oil price forecast 2020-2024

The price of West Texas Intermediate (WTI) crude oil is expected to reach an average of 74.43 U.S. dollars per barrel in 2023, according to a July 2023 forecast. Weekly crude oil prices have been surging to highs not seen since 2008 as the Russia-Ukraine war has had severe implications for the trading of numerous commodities from oil to wheat. However, by September, high inflation and concerns over a worldwide recession have seen oil prices decrease slightly, which has also affected the outlook for WTI prices for the rest of the year.

What are benchmark crudes?

WTI is often used as a price reference point called a benchmark (or ”marker”) crude. This category includes Brent crude from the North Sea, Dubai Crude, as well as blends in the OPEC reference basket. WTI, Brent, and the OPEC basket have tended to trade closely, but since 2011, UK Brent has been selling at a higher annual spot price than WTI, largely due to increased oil production in the United States.

What causes price volatility?

Oil prices are historically volatile. While mostly shaped by demand and supply like all consumer goods, they may also be affected by production limits, a change in U.S. dollar value, and to an extent by market speculation. As shown in this statistic's forecast, the WTI annual average price is close to the the peak of nearly 100 U.S. dollars recorded in 2008. That year, multiple factors, such as strikes in Nigeria, an oil sale stop in Venezuela, and the continuous increase in oil demand from China were partly responsible for the price surge. Higher oil prices allowed the pursuit of extraction methods previously deemed too expensive and risky, such as shale gas and tight oil production in the U.S. The widespread practice of fracturing source rocks for oil and gas extraction led to the oil glut in 2016 and made the U.S. the largest oil producer in the world.