Oil prices are always in the spotlight of analysts and major players in the energy market. Regularly published forecasts in this respect present a current look into the future. Based on such forecasts, companies draw up their budgets, investors build up positioning in assets, and oil and gas states specify the price of hydrocarbons in their main financial document.
Today, many experts note that oil prices have risen to the maximum in a year and continue to rise.Analyzing the price growth drivers, they note that the market was supported by the Ministerial Monitoring Committee OPEC + (JMMC) statement, which stressed the importance of an immediate acceleration of balancing the oil market, reducing production by Saudi Arabian, decreasing commercial oil reserves, as well as expectations of global economic growth due to the spread of vaccines and a reduction in the spread of the pandemic.
The experts’ current view of the market prospects reflects the consensus-forecast based on Bloomberg polls, suggesting the price of $47.8 per barrel of Brent Crude in 2021. The average annual price may rise to $53.5 in 2022, to $54 in 2023 and above $60 in 2024, reaching $60.8 per barrel.
The forecasts of the analysts at Fitch and Moody’s rating agencies for the average annual price for Brent Crude range from $40-45 to $53-65 per barrel.
Approximately the same values are considered the most realistic by experts in the commodity markets of large Western banks.Thus, according to experts at Goldman Sachs, Brent prices will reach $65 per barrel by the end of 2021.
The average annual estimate is $55 per barrel.The bank’s analysts associate this growth with a high pace of recovery in demand as COVID-19 restrictions are eased.
Analysts expect the oil market to be in deficit throughout 2021.
According to Alexander Dyukov, the head of Gazprom Neft, the oil price from $45-55 to $60 per barrel is stable in the long term, which is explained by the recovery in demand for it. OPEC also predicts a recovery in global oil demand in 2021.
According to the organization, global oil demand this year will grow by 5.8 million bpd, to be as high as 96.1 million bpd.The IEA also expects global oil demand to grow by 5.4 million bpd in 2021.
It is expected that the crude oil production in the Organization of the Petroleum Exporting Countries (OPEC) will be 27.2 million bpd in 2021 against about 25.6 million bpd in 2020.
According to a report from the Energy Information Administration of the US Department of Energy, the predicted growth reflects the announced production increase in the OPEC countries, as well as in Libya, while it is noted that the latest agreement under the OPEC+ also implies a production increase in Russia and Kazakhstan by 500 thousand bpd in February March 2021.
In 2022, oil production may increase by another 1.1 million bpd, and such expectations raised the forecast by the US Department of Energy for the cost of Brent Crude in 2021 from $48.53 to $52.7 per barrel.
According to the ministry, the cost of this oil grade in 2022 will be set at $53.44 per barrel.