BAKU, Azerbaijan, July 29
By Leman Zeynalova – Trend:
Oil prices are expected to retreat to $65-$70/b range in 2022, Trend reports with reference to Oxford Energy Institute.
“Our reference forecast for Brent is nudged up at $68.7/b in 2021 and $68.9/b in 2022. Oil prices are expected to remain in the $70/b and $80/b range for the rest of 2021 as global oil demand heads towards a strong second half of the year. But absent any upside surprises, they are seen to retreat to the $65/b and $70/b range in 2022 on the assumption that OPEC+ returns the withheld barrels and Iran ramps up its production in H1 2022.
Demand growth remains a wildcard in 2022, but even assuming strong global economic performance, our analysis suggests that the oil price remains confined in the $60/b and $80/b range. Global oil demand growth in 2021 is upgraded to 5.7 mb/d and to 3.2 mb/d in 2022. Global oil demand heads to a strong second half of the year, with the demand rebound in the US, Europe and China taking over the growth baton, as other non-OECD consumers continue to underperform with slow vaccination progress.
By Q4 2021, global oil demand is expected to rise to -0.8 mb/d below Q4 2019 levels, from -5.6 mb/d in Q2 2021. § Global oil supply growth is upgraded to 2.1 mb/d in 2021 and 6.3 mb/d in 2022. The gradual easing of OPEC+ cuts amid the return of Iranian production are seen increasing supplies into 2022. Non-OPEC supply growth in 2021 remains modest, before gaining some momentum in 2022 with the US leading the growth.
Risks to the outlook remain relatively balanced, but downside pressures persist with the OPEC+ deadlock increasing uncertainty on the supply path. Oil prices remain confined in the $60/b and $80/b range, with new supply pressures keeping the balance of risks into negative territory. Demand risks remain fairly balanced in both years and tilted on the upside, standing at $0.8/b in 2021 and $1.7/b in 2022,” reads the report released by Oxford Energy Institute.
---
Follow the author on Twitter: @Lyaman_Zeyn