Brent crude, the global benchmark for oil prices, is likely to remain around $40 per barrel in the rest of the current calendar year but could be headed towards $50 per barrel in 2021, according to S&P Global Platts.
The provider of benchmark price assessments said in a statement the key to prices in coming months is the pandemic and OPEC/OPEC+ behavior as both face bearish risks, adding the dated Brent is forecast to stay in high $30s/low $40s/b for remainder of 2020.
"For 2021, stock draws, Q1 OPEC+ discipline, and a rising call on OPEC+ for H2 should support Dated Brent prices up towards $50/b by end-2021, WTI to $47/b," the statement said quoting Chris Midgley, Global Director of Analytics, S&P Global Platts.
The global oil supply continues to increase as shut-ins from the summer return and Libya embarks on its speedy recovery. This is despite US declines that have likely started already. Platts sees OPEC+ as likely to delay their planned tapering of production cuts for Q1.
On the demand side, increasing COVID-19 infections, lockdowns in Europe, uncertainties in the US and slowdown in China have clouded the oil demand recovery. The outlook for 2021 will continue to be affected by these factors, particularly COVID-19.
The next year’s demand growth is forecast to be 5.8 million barrel per day over 2020 while on a net basis, demand in 2021 is expected to be 2.6 million b/d less than that of 2019.