Barclays Raises Its Oil Price Forecast

Barclays Bank said on Thursday that supply and demand factors in the oil market predict a slow increase in prices over the next few months and raised its forecast for the price of crude oil in 2021 by between three and five dollars a barrel.

“Oil prices could rise to $100 a barrel over the coming months if OPEC+ is too slow to increase supply again, given the relatively inflexible response to non-OPEC+ supply,” Barclays said in a note.

“But we doubt that the organization will see this as an ideal outcome given the potential to undermine demand too much and political considerations,” he added.

Oil prices rose today due to the expectation of a scarcity of inventories with the recovery of economies; Brent crude was around $ 72.86 a barrel.

The average price of US West Texas Intermediate crude is expected to reach $67 a barrel this year, up from $62 in the previous forecast, and will reach $65 next year.

The Organization of the Petroleum Exporting Countries and its allies, known as the OPEC+ group, agreed to increase the oil supply by 400,000 barrels per day each month from August through the end of the year.

Barclays said that while the outbreak of the Coronavirus mutant poses negative risks to the recovery of demand, its impact will be much less than at the beginning of the year, thanks to vaccination campaigns.