Standard Chartered on Wednesday raised its average 2021 Brent crude price forecast to $51 per barrel, while Swiss bank UBS expects Brent to rise to $60 per barrel by mid-year after Saudi Arabia’s unilateral decision to cut oil production.
The world’s biggest oil exporter on Tuesday said it would make additional, voluntary oil output cuts of 1 million barrels per day (bpd) in February and March, lifting oil prices to 11-month highs. [O/R]
Standard Chartered raised its Brent price outlook by $7 a barrel to $51 and $59 for 2021 and 2022, respectively.
“While we still see downside risk for oil prices in second quarter, we think Saudi Arabia’s actions have significantly strengthened the floor for prices,” the bank wrote in a note on Wednesday.
The delay in OPEC+ production increases for most countries, combined with Saudi Arabia’s cut and payback of past overproduction by other countries, will keep the prompt crude oil market tight, despite demand sluggishness, Standard Chartered added.
By Anjishnu Mondal and Swati Verma