Barclays cut its 2023 oil price forecasts on March 8, due in part to more resilient output from Russia than expected, and said the market could flip into a deficit in the second half of the year due to growing demand in China.

The bank cut its average forecasts for the Brent and West Texas Intermediate (WTI) benchmarks by $6/bbl and $7/bbl, respectively, to $92/bbl and $87/bbl.

It also forecast Brent would average $97/bbl next year and WTI $92/bbl.

The market could flip into a deficit of 500,000 bbl/d in the second half of this year as China's reopening from pandemic restrictions "matures" and as supply growth from outside the OPEC+ producer group slows, the analysts added.

China's oil demand could increase by 500,000 bbl/d to 600,000 bbl/d in 2023, Haitham Al Ghais, the secretary general of the Organization of the Petroleum Exporting Countries (OPEC), said on March 7 at the CERAWEEK conference, with global oil demand seen rising by 2.3 MMbbl/d in 2023.

Barclays, meanwhile, revised its 2023 demand estimate 150,000 bbl/d higher due in part to a somewhat improved growth outlook for the United States and Europe. It sees a 900,000 bbl/d increase in Chinese demand this year.

The Group of Seven economies, the European Union and Australia agreed a price cap on Russian oil late last year, aiming to deprive Moscow of funds for its war in Ukraine.

Barclays said the risk of a deceleration in broader economic activity remained due to flat industrial activity and continued tightening of monetary conditions.

Brent crude futures were up 0.1% to $83.40/bbl at 1103 GMT, while U.S WTI crude futures were down 0.1% to $77.49/bbl.