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Oil set for steady gains as economies shake off pandemic blues: Reuters poll

Published 02/26/2021, 06:06 AM
Updated 02/26/2021, 06:25 AM
© Reuters. FILE PHOTO: The price of gasoline is shown on a gas pump at an Arco gas station in San Diego

© Reuters. FILE PHOTO: The price of gasoline is shown on a gas pump at an Arco gas station in San Diego

By Sumita Layek and Bharat Gautam

(Reuters) - Oil prices will stage a steady recovery this year as vaccines reach more people and speed an economic revival, with further impetus coming from stimulus and output discipline by top crude producers, a Reuters poll showed on Friday.

The survey of 55 participants forecast Brent crude would average $59.07 per barrel in 2021, up from last month's $54.47 forecast.

Brent has averaged around $58.80 so far this year.

"Travel and leisure activity look set to catch up to buoyant manufacturing activity due to the mix of stimulus, confidence, vaccines, and more targeted pandemic measures," said Norbert Ruecker of Julius Baer.

"Against these demand dynamics, the supply side is unlikely to catch up on time, leaving the oil market in tightening mode for months to come."

Of the 41 respondents who participated in both the February and January polls, 32 raised their forecasts.

Most analysts said the Organization of Petroleum Exporting Countries and allies (OPEC+) may ease current output curbs when they meet on March 4, but would still agree to maintain supply discipline.

"With OPEC+ endeavouring to keep global oil production below demand, inventories should continue falling this year and allow prices to rise further," said UBS analyst Giovanni Staunovo.

Oil demand was seen growing by 5-7 million barrels per day in 2021, as per the poll.

However, experts said any deterioration in the COVID-19 situation and the possible lifting of U.S. sanctions on Iran could hold back oil's recovery.

The poll forecast U.S. crude to average $55.93 per barrel in 2021 versus January's $51.42 consensus.

Analysts expect U.S. production to rise moderately this year, although new measures from U.S. President Joe Biden to tame the oil sector could curb output in the long run.

© Reuters. FILE PHOTO: The price of gasoline is shown on a gas pump at an Arco gas station in San Diego

"A structural shift away from fossil fuels" may prevent oil from returning to the highs of previous decades, said Economist Intelligence Unit analyst Cailin Birch.

Latest comments

Earth can CONSIDER remaining a blue Planet AFTER oil prices EXCEED $400/bbl. Alternative: 'marsification' (erosion of all life, and reddening of appearance as observed from Space). Think about it. Tic-toc.
Typical twisted info from Reuters.Biden ordered military strikes in Syria, causing unstability in the middle east.
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