BAKU, Azerbaijan, Apr.21
By Leman Zeynalova – Trend:
Oil prices are forecast to average $56/ bbl in 2021 and rise to $60/bbl in 2022, broadly in line with their 2017-19 average, Trend reports with reference to the World Bank (WB).
WB expects demand to firm over 2021 as the economic recovery gains momentum and vaccinations become more widely available, particularly in advanced economies.
“The forecast is a significant upward revision from the October estimate, primarily reflecting lower-than-expected OPEC+ production and the improved economic outlook.
Oil demand growth estimates have been revised upwards recently amid an improved economic outlook and policy support measures in major economies. All three major forecasters currently expect oil demand in 2021 to average around 3 percent below 2019 levels, and the IEA expects that oil demand will return to pre-pandemic levels by around 2023.
The brighter demand outlook follows consecutive downward revisions during the second half of 2020, which reflected a worse-than-expected and longer-lasting impact of the pandemic on oil demand. Supply is also set to increase during 2021. OPEC+ intends to increase production by 0.35mb/d in May and June, and by a further 0.45mb/d in July, with Saudi Arabia also gradually unwinding its additional voluntary cut of 1mb/d over this period. The group is likely to gradually increase production through the rest of 2021 but has announced it will reduce production if necessary.
In the United States, the EIA expects production to gradually rise over the forecast horizon. While production in 2021 is forecast to be slightly lower than in 2020, it is then anticipated to increase by just under 1mb/d in 2022. Production is also expected to rise in Brazil, Guyana, and Norway, largely driven by increased production from new fields, such as the Johan Sverdrup field in Norway, and the Liza field in Guyana. However, the reduction in investment in 2020 has resulted in the cancellation or delay of many new projects, dampening the rise in global production from 2021 onward,” reads the WB report.
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