According to Reuters, during the rollout of the vaccination program, oil prices are likely to remain near the current levels. Such a situation will take place until the end of the year, analysts emphasize. Oil demand may moderately recover by December 2021 amid the vaccination against COVID-19. According to the poll conducted by Reuters, most experts forecast that Brent crude will settle at $54.47 a barrel. Notably, last month, analysts foresaw the price of $50.67 a barrel. In January 2021, Brent averaged $54 a barrel.
Analysts suppose that the mass vaccination may trigger a jump in economic and tourism activity. They expect the improvement in the second half of 2021. However, the full recovery will take much more time. The estimates provided by the International Energy Agency prove that new virus cases are posing risks to the global oil recovery.
Economists emphasize that the global oil market is suffering dark times. Economist Intelligence Unit analyst Cailin Birch said that demand should recover to 2019 levels in 2023. Analysts also expect that OPEC+ will gradually lift production in spring this year in line with rising demand, keeping the overall quota system in place until 2022.
To halt a slide in oil demand, Saudi Arabia has pledged additional output cuts of one million barrels per day in February and March. At the same time, most OPEC+ producers are planning to hold production at the current levels.