The positive outlook for a global economic recovery will continue to support oil prices this year and next, the ADB said in an update to its Asia Development Outlook report, APA-Economics reports.
The International Energy Agency in August forecast global oil consumption rising by 5.3 million barrels per day in 2021 and 3.2 million in 2022. The decision of OPEC+ to raise production and the continued increase in US oil production will help meet the expected increase in global oil demand. Because of this, moderate downward oil price pressures will emerge as global oil production rises and cause inventories to be drawn down at a slower pace.
"This, coupled with the forecast deceleration in the growth of global oil demand and the negative sentiment on the effectiveness of vaccines to control new COVID-19 variants, will limit upward pressure on oil prices," the ADB said.
Given these developments and the recent strengthening of crude oil prices, the ADB’s forecast price of Brent crude is revised up to average $69 per barrel in 2021 and $67 in 2022. However, according to the bank, the oil market remains volatile and highly dependent on the success of vaccine rollouts and the easing of travel restrictions in the world’s major economies. New COVID-19 variants, geopolitical tensions, and volatility in the supply of oil are key risks to the outlook.
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