The recovery in oil demand and the less-than-feared demand destruction earlier this year will support oil prices next year when producers will be playing catch up with demand, and Brent oil prices could rise to $66 a barrel, according to Energy Aspects.
Brent Crude prices are set to jump to $66 a barrel in 2021 and $83 a barrel in 2023, from $43 per barrel in 2020, Amrita Sen, co-founder, Director of Research, and Chief Oil Analyst at Energy Aspects, said in a presentation at a virtual energy conference, as carried by Bloomberg.
According to the energy analyst, the worst of the demand destruction was 18 million barrels per day (bpd) during the April lockdowns, while expectations were for many more barrels lost, to the tune of 30 million bpd. Energy Aspects itself had expected a drop of 28 million bpd, while the actual maximum demand loss was 18 million bpd, Sen said.
Deloitte also said prices would be going up next year and the following two years, as demand continues to recover, according to its oil price forecast seen by Bloomberg. Deloitte sees Brent Crude prices averaging $39 a barrel in 2020, but rising to average $46.50 next year and $64 per barrel in 2023.
Goldman Sachs also expects that prices will rise in 2021, although the short-term forecast stays at $35 a barrel, according to Jeff Currie, global head of Commodities at the investment bank.
Currie is sticking to the $35-a-barrel oil price forecast over the short term, he told Bloomberg last week, adding that if prices increased quickly, they would interfere with the market rebalancing by bringing more shale production back online.
As for demand and supply, Currie noted a marked improvement in demand, although in some parts of the U.S., it may be adversely affected by the resurgence in Covid-19 cases, notably in Texas and Florida.