The Economist Intelligence Unit (EIU) expects global oil prices to stay above $80 per barrel until late 2025, according to its recent latest projection.
This will have a significant impact on inflationary pressures for many countries, especially those experiencing currency depreciation against the US dollar.
The UK-based firm, citing data from the International Energy Agency, noted that the global oil market entered a deficit in the first quarter of 2024 due to geopolitical tensions and supply-demand pressures driving prices up.
“We have revised our oil price forecasts, with dated Brent Blend expected to remain above US$80/barrel until late 2025. This will increase inflationary pressures in many countries as their currencies weaken against the dollar.”
The EIU also predicts that oil prices will trade near $90 per barrel for the next few months of this year.
“Even with minimal disruptions to oil shipments and traders overlooking military escalation concerns, prices are likely to stay high due to the global market deficit. OPEC+ is expected to adhere to reduced output quotas, and Saudi Arabia will maintain sharp voluntary cuts until mid-2024, gradually increasing production towards the end of the year.”
“We anticipate a modest increase in US production in 2024 before stabilizing in 2025. Despite rising prices, the US oil rig count has decreased by 14% from last year, with companies prioritizing shareholder dividends.”
The recent projection from the EIU is anticipated to affect Ghana’s economy, which is grappling with inflation, depreciation of the cedi, and an ongoing IMF program.