Oil prices are likely to remain at current highs in March and April, with Brent Crude averaging between $ 65 and $ 70 a barrel after the OPEC + group unexpectedly decided to keep its production cuts at in April, the U.S. Energy Information Administration (EIA) reported Wednesday.
In its short-term energy outlook (STEO) for March, the EIA expects Brent prices to average $ 65-70 per barrel in March and April, more than $ 10 per barrel per above the February forecast, mainly due to OPEC + production in April.
Earlier this month, the OPEC + alliance decided not to increase production from April, except for small increases for Russia and Kazakhstan, while OPEC’s main producer and de facto leader, Saudi Arabia, maintains its additional reduction of 1 million bpd in April. This was contrary to market expectations that they had revolved around the group that reduced the cuts by 500,000 bpd and that the Saudis invested the additional reduction.
For the second quarter of 2021, the EIA sees Brent prices at $ 64 per barrel on average and after $ 58 per barrel in the second half of 2021, as it expects downward pressures to appear in the coming months in as the oil market balances.
Wood Mackenzie expects oil prices to rise between $ 70 and $ 75 a barrel during the month of April, with stock picking up significantly more than $ 1 million a barrel a day next month as the year approaches. summer demand season.
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“The risk is that these higher prices will dampen the attempted global recovery. But Saudi Energy Minister Prince Abdulaziz is adamant that OPEC + must watch for concrete signs of rising demand before it passes. in production, ”Ann-Louise Hittle, vice president of Macro Oils, told Wood Mackenzie after the OPEC + meeting last month.
Following the surprise decision by OPEC + to keep oil production flat in April, Goldman Sachs now sees Brent prices reach $ 80 a barrel in the third quarter of this year and $ 75 a second quarter, an increase of $ 5 compared to the previous forecast released just two weeks earlier.
By Charles Kennedy for Oilprice.com
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