Oil prices are expected to average $56/bbl in 2021 before rising to $60/bbl in 2022, a substantial upward revision from the October report, APA-Economics reports citing forecast of the World Bank.
"The revision reflects the improved global economic growth outlook, as well as a more gradual increase in production by OPEC and its partners (OPEC+) than previously expected. However, a further deterioration in oil demand, perhaps arising from a renewed outbreak of COVID-19 could put considerable additional pressure on the OPEC+ production agreement. An end to the agreement and a sudden increase in global production could result in oil prices being materially lower than currently expected. A further risk is the response of U.S. shale to higher prices—a faster than expected recovery in U.S. production would also put significant pressure on the OPEC+ producers," Bank noted.