Barclays Bank Raises Its Forecast For Oil Prices as Major Producers Are Cautious

Barclays raised its forecast for oil prices this year at $4 a barrel, indicating that major producers are cautious about oversupply as demand recovers gradually from the recession caused by the pandemic.

The bank now expects a price for Brent crude at $66 a barrel and for US West Texas Intermediate crude at $62 a barrel in 2021, and at $71 and $68 a barrel, respectively, in 2022.

OPEC and its allies agreed this month to extend most of the oil production cuts until April, while Saudi Arabia extended its voluntary production cut by one million barrels per day.

Barclays trimmed his expectations for an increase in OPEC+ supplies due to the group’s continuing cautious approach and now expects only a partial retreat from Saudi Arabia’s unilateral cut, adding that the kingdom may not fully back down from “the unilateral cut this year.”

“We expect US crude oil production to grow by 600,000 barrels per day and 800,000 barrels per day by the last two quarters of 2021 and 2022, respectively,” Barclays said.

Iranian supplies are expected to rise 0.6 million barrels per day on an annual basis in 2022, given the possibility of an improvement in relations between Iran and the United States and the lifting of some sanctions.