Oil Prices Face Uphill Struggle In 2021 Despite Vaccine Progress: Reuters Poll
Oil costs will wrestle to achieve upward traction subsequent yr as demand stays within the grip of the coronavirus pandemic regardless of rising optimism over vaccines and a probable extension of output cuts by prime producers, a Reuters ballot confirmed on Monday.
The ballot of 40 economists and analysts forecast Brent would common $49.35 a barrel subsequent yr, little modified from final month’s $49.76 outlook. The benchmark has averaged about $42.50 per barrel up to now in 2020.
“The worldwide oil demand outlook stays precarious given the resurgence of the pandemic and ensuing lockdowns in Europe and the U.S.,” mentioned Marshall Steeves, vitality markets analyst at IEG Vantage.
“It will doubtless stay the case by the primary quarter of 2021 if not the second, thus OPEC+ faces muted demand for his or her oil.”
Rising Libyan output additionally posed a headwind, analysts mentioned, because the market focuses on a gathering on Nov. 30-Dec. 1, when the Group of the Petroleum Exporting International locations, Russia and different producers, a grouping generally known as OPEC+, resolve technique.
OPEC+ is leaning in the direction of delaying the group’s present plan to spice up output in January by 2 million barrels per day (bpd) to help a market hammered by the pandemic..
World demand was seen rising by 5.1 million to six.three million bpd in 2021, led by China.
“At the moment the Achilles heel on the demand facet is the aviation sector. Enterprise-related journey may nonetheless be low subsequent yr, as corporations might make larger use of video convention calls,” mentioned UBS analyst Giovanni Staunovo.
The survey forecast U.S. WTI crude futures would common $46.40 a barrel in 2021, versus October’s $46.03 consensus.
“U.S. rigs are coming again to life however a Joe Biden administration ought to derail something that permits for a large upswing with manufacturing,” mentioned Edward Moya, senior market analyst at OANDA.
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