Oil Prices Seen Break Pass $50 In H2, 2021

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Brent Crude prices are set to average $42.35 a barrel this year and $49.25 per barrel in 2021, according to IHS Markit’s latest price forecast, which was raised by $7 a barrel for next year compared to the previous projection in May.

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After the worst of the demand crash in April, oil markets are now “at a delicate pivot point as they transition to phase II” of the recovery expected by IHS Markit.

In recent weeks, oil prices have been relatively stable, with Brent Crude trading in the narrow $40-$45 per barrel range.

The price of Brent “could conclusively pass the $50 per barrel mark in the second half of 2021,” Roger Diwan, vice president financial services at IHS Markit, said in a note on Thursday.

Brent Crude prices are expected to remain in the $40-$47 per barrel price range on average over the next four quarters, if there isn’t a major second wave of COVID-19 that could prompt widespread economic shutdowns, according to IHS Markit.

The current market fundamentals are not conducive to a jump in oil prices as OPEC+ and North American producers are bringing back a total of around 4 million bpd on the market in July and August, the consultancy says.

At the same time, there are signs of stalling oil demand recovery, while China’s record crude buying spree may be coming to an end.

“As long as prices hold in the current range, demand concerns will likely help keep the [OPEC+] agreement on course. When prices surpass $50/bbl, potentially lifting capital spending in the United States higher, that is when changes to the tenor of the discussion, and the divergence of interest could start to play out,” Diwan said.

Oil prices are unlikely to go much higher than current levels if global oil demand recovery doesn’t pick up in a meaningful way in the second half of the year, the monthly Reuters poll of analysts and economists showed last week.

Godwin Okafor
Godwin Okaforhttps://naija247news.com
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.

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