As major economies around the world continue to reopen amid ongoing vaccination efforts, the global demand for crude oil is expected to rebound, especially as OPEC+ keeps its cautious supply approach intact.
Although the prospects of Iran’s oil supply returning to the global market are increasing, coupled with a resurgence of Covid-19 across several key regions in Asia, the global demand for crude oil is recovering. According to a note by Barclays and later cited by Reuters, oil inventories are expected to normalize over the next several months, with the global market forecast to hit a deficit of approximately 1.5 million barrels per day by the second half of 2021.
“Extended mobility restrictions in the region [Asia] might slow the demand recovery somewhat, but seem unlikely to stall it for a sustained period, given largely positive results of vaccination programs worldwide,” Barclays analysts explained. The UK -based bank forecasts Brent Crude prices to average around $66 per barrel this year, while WTI Crude is expected to average $62 per barrel.
Similarly, Goldman Sachs last month also noted that it expects “the biggest jump in oil demand ever” within the next six months. The bank’s analysts forecast oil demand to surge by 5.2 million bpd during that time period.
Information for this briefing was found via Barclays and Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.