BAKU, Azerbaijan, May 12
By Leman Zeynalova - Trend:
The US Energy Information Administration (EIA) expects upward pressure on the Brent price to ease and the Brent price to decrease to average $65/b in the second quarter, Trend reports with reference to EIA.
The EIA forecasts that Brent prices will average $61/b during the second half of 2021, and $61/b in 2022.
“Brent crude oil spot prices averaged $65 per barrel in April, unchanged from the average in March. Brent prices were steady in April as market participants considered diverging trends in global COVID-19 cases. In some regions, notably the United States, oil demand is rising as both COVID-19 vaccination rates and economic activity increase. In other regions, notably India, oil demand is declining because of a sharp rise in COVID19 cases,” said the latest EIA report.
After approaching a 2021 high in early March of almost $70/b, Brent crude oil prices declined to between $60/b and $65/b in mid-March through the first half of April. However, in the second half of April and into early May, crude oil prices began to rise, likely as a result of crude oil and petroleum product inventory draws and higher expectations for summer gasoline demand, particularly in the United States.
The rise in oil prices was likely reinforced by macroeconomic indicators that pointed to continued economic recovery and led to price increases across a broad range of commodities, discussed in detail below. News of rising COVID-19 cases in India offset some of the expectation of rising demand globally, but India’s increase in cases has not prevented crude oil prices from rising; they climbed to their monthly highs of $68.56/b for Brent and $65.01/b for WTI as of April 29. Oil market developments during the past month occurred against a backdrop of continuing production restraint from OPEC+, which likely contributed to some upward price pressure.
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