Here are the latest oil price forecasts for 2021

Oil prices are expected to hover above $50 a barrel to even hitting a high of $60 a barrel in 2021, according to estimates of top investment banks and entities.

This week, OPEC+ announced that member states would keep production broadly steady in February and March. However, Saudi Arabia offered voluntary cuts to its oil production by additional 1 million barrels per daily (bpd) in February and March.

Read: Saudi Arabia to cut oil output by additional 1 mln bpd in February, March

Argaam has compiled the forecast from some of them.

In its report, MUFG Bank expects Brent, the international oil benchmark, and West Texas Intermediate (WTI) to average $58 and $54 per barrel, respectively in 2021, but may end the year at $64 and $61 per barrel, respectively.

“It’s easy (and accurate) to present the 2021 oil price outlook as a V-shaped vaccine trade. What is striking about the forward oil outlook is the apparent degree of unanimity (or at least strong consensus) as 2020 comes to a close. Indeed, the oil market appears to be singing from the same bullish 2021 hymn sheet,” Japan’s largest bank noted.

Brent is likely to surge to $60 per barrel by mid-year, driven by Saudi Arabia’s voluntary production cut and expectations of a sharp recovery in demand in Q2 on vaccine rollouts, Swiss investment bank UBS said in a report.

The Saudi move would help to accelerate the process of reducing oil inventories, the bank noted.

Fitch Solutions forecast Brent to average $53 this year, dropping to $51 in 2022 and rising to $60 in 2024.

“We maintain our 2021 Brent forecast, with the benchmark to set average $53 per barrel this year, as OPEC looks poised to regulate oil supply based on monthly changes in the demand outlook,” the consultancy stated.

On the other hand, Goldman Sachs predicts oil at $65 a barrel by 2021-end.

“Saudi Arabia’s action and the prospect for a tight market in the second quarter of 2021, as the rebound in demand, stresses the ability to restart production, will likely support prices in coming weeks, leading us to reiterate our bullish oil view,” the investment bank noted.

In December 2020, the US Energy Information Administration predicted Brent and WTI to average $48.53 and $45.78, respectively, in 2021.

Writer to Parag Deulgaonkar at parag.d@argaam.com