Price of Brent crude oil in 2021 will vary mainly within the range of $40-45 per barrel, Moody’s rating agency forecast in its report. In the medium term, prices will be in the range of $45-65 per barrel, mainly at the lower border of this range.
At these prices, producers will strive to develop only the cheapest oil reserves in the next 3-5 years. To develop high-margin resources, companies need a price within $50-55 per barrel, the report said.
The agency also expects that oil and oil product reserves in the world will remain high and will decline at a slow pace. US shale oil producers have been drilling more actively against the backdrop of rising oil prices. But a noticeable acceleration in US production can be observed if WTI prices stay above $55 per barrel.
Moody’s experts believe that after a weak 2020, the oil market will begin to recover in 2021. However, companies’ EBITDA will still be below the 2019 level, by about 20%, and capital expenditures will be reduced.