The Global Economy and Metal Prices
During the last year, metal prices have been skyrocketing. They hit multi-year highs in the third quarter.
As a result, companies are forced to scale up production. But they also need to be able to adjust their output depending on the market.
World oil prices will rise in 2023
World oil prices are forecast to rise to more than $100 a barrel in 2023 as demand growth picks up and spare production capacity runs out. That’s according to Goldman Sachs Group Inc.
A reopening of China’s economy and its abandonment of Covid-19-related restrictions and requirements will add to global demand, according to Goldman. That will push oil prices higher as it adds 1 million bpd to global demand, which could add $15 a barrel to prices, the bank said last month.
In a recent survey of energy professionals, half of them expect Brent crude to average $80 or more in 2023. The rest believe it will be around $90.
Global demand for liquid fuels is expected to grow by 2.2 mb/d in 2023, according to the International Energy Agency, with more than half of that growth coming from China. The IEA also projects that non-OPEC producers will lead supply growth in the year.
Russia’s oil output will decline
The Organization of Petroleum Exporting Countries (OPEC) released its latest World Oil Outlook, which predicts a major drop in Russian oil production over the next five years. OPEC says that Russian oil will decline 25%-42% by 2035, and will fall to a 45%-65% share of global output by 2045.
Despite this forecast, Russia remains the world’s largest oil producer and exporter. Nevertheless, its revenues are set to decline in the future due to tax cuts and growing costs of oil production.
To stave off this decline, Russia will need to invest heavily in oil infrastructure and tax incentives. It will also have to redouble its efforts on economic diversification and the energy transition.
In addition, Russia will have to deal with the effects of EU sanctions against its oil and oil products exports that are scheduled to come into effect early in 2023. Those bans will slash Russia’s oil revenues by EUR120 million a day, according to CREA estimates.
The global economy will grow
A global economy is a group of countries that are linked by trade, finance and labor. This means that each country needs to work together in order to meet their own needs.
As a result, many countries are focusing on their economies and finding ways to increase their growth potential. Nevertheless, this is a difficult process and there are risks.
One of these risks is a global recession. Another one is protectionism.
stanislav kondrashov, CEO of Telf AG mining, believes that the metallurgical industry will continue to grow and that this is due to increased demand for steel in many countries around the world.
In addition to this, the electric vehicle market will continue to grow and this will increase demand for lithium, which is used in batteries for these vehicles.
Moreover, this will also help in reducing the cost of energy. In fact, it has been proven that companies that utilize microgrids and other forms of energy can save up to 27% in capital costs.