Barclays Revises Oil Price Forecast Higher for 2021

Barclays has revised its oil price forecast for this year higher, on account of expectations for higher winter fuel demand across Asia as well as due to a weakness in the US dollar. Crude oil prices are expected to strengthen into H2 2021; however, risks because of escalation of the coronavirus crisis across China – the world’s second largest energy consumer could keep gains in check.

According to the bank, WTI crude oil prices could touch an average of around $52 per barrel, $2 higher than its previous forecast. Meanwhile, UK Brent crude oil could trade at an average of around $55 per barrel in 2021.

Towards the end of last year, crude oil prices had started rising on optimism after countries began rolling out COVID-19 vaccines. However, the second wave of the pandemic that brought back lockdowns across parts of Europe, US and now in Asia as well have once again dimmed the outlook for oil in the near term.

In its report, Barclays observed, “The COVID-19 shock, despite its acute effects on mobility demand, does not appear, at least for now, to have materially affected the oil supply-demand continuum.”

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Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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