Optimistic forecasts … a barrel of oil will reach $ 80 this summer


Elaf from Dubai: With the increase in the number of Corona cases in India, which is the third largest importer of oil in the world, demand for crude was affected and prices were clearly under pressure, after the “OPEC +” alliance, last year, faced a difficult challenge through the necessary intervention on the supply side to offset the demand for oil. Deficiency due to the epidemic.

Despite the coalition’s relative success in curbing oil production and preventing excess stocks from inflation before the market fully recovers, the rising cases of coronavirus in India have prevented oil prices from recovering faster.

This put more pressure on OPEC + to meet market expectations. However, there is no doubt that there has been a shift in the momentum of the oil market, according to a report published by Al-Arabiya.net.

In fact, oil prices have recovered to some extent in recent months, and the vast majority of oil experts and analysts believe that this trend will continue, according to the “Oil Prices” website and seen by “Al Arabiya.net”, but the question changes: will there be a recovery in the prices? How fast is this recovery?

European Union officials this week submitted a proposal to ease summer travel restrictions to its 27 countries. This will increase demand for jet fuel, which accounts for a large part of the demand for crude oil.

In the United States, Corona cases are also shrinking, while the number of vaccinated people increases. As a result, many US states, including New York, are beginning to loosen restrictions. All of this will have a profound effect on the price of Crude Oil.

But that does not mean that all analysts agree on what this will have on demand, let alone what impact it will have on energy prices.

Initially, the International Energy Agency revised its forecast for oil demand for this year on April 14th. According to its estimates, oil demand will now increase by 5.7 million barrels per day this year, to reach 96.7 million barrels per day. The reason for this upward revision is due to increases in oil demand forecasts for the International Energy Agency in the United States and China, the largest oil importers in the world.

As of April 6, the Energy Information Administration witnessed an increase in global demand for oil at 97.7 million barrels per day this year, according to Al-Arabiya.net.

Compared to Brent prices, which were close to $ 65 a barrel in March, the Energy Information Administration does not see a significant movement in the benchmark crude price, as it was estimated at $ 65 per barrel in the second quarter of 2021, and $ 61 per barrel in the second half of 2021, even worse: $ 60 a barrel in 2022.

Even a week ago, Rystad Energy revised its oil demand forecast for April, down by about 600,000 barrels per day. It also reduced it for the month of May, by 914 thousand barrels per day, citing the problems of demand in India as a result of the epidemic, a situation that will undoubtedly lead to a new glut in stocks.

For his part, Goldman Sachs believes that things are more optimistic, as it expected the price of oil to reach 80 dollars this summer, justifying this positive view of oil prices that “the size of the next change in the volume of demand should not be underestimated, which is“ a change that cannot be commensurate with Display”.

While Rystad analyst Louise Dickson said that oil demand should continue to increase by 3 million barrels per day between now and the end of June, whether India is in trouble or not. It also expected oil prices to return to $ 70 a barrel in the coming months.

Giovanni Stonovo, an analyst for the Swiss UBS bank, believes that the launch of the vaccine is a major positive factor for the oil industry. As people return to normal activities and fully reopen businesses, the demand for oil will lead to a rise in the price of Brent crude to $ 75 a barrel in the second half.

Moody’s also has a moderately positive view of the timing of the oil price recovery, citing pent-up consumer demand that will propel the global economic recovery forward. However, it set the price range in the medium term around $ 65 a barrel.

Moody’s believes that this economic recovery speeds up the recovery of oil demand until the end of this year and the beginning of next year.

The outlook may be uncertain, but the current trend is definitely lower oil inventories. In the US oil market, commercial crude inventories finally fell to the five-year average for this time of year at 493 million barrels.


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