Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

OPEC cuts, vaccines to sustain oil's recovery: Reuters poll

CommoditiesMar 31, 2021 07:20AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A 3D printed oil pump jack is seen in front of displayed stock graph and Opec logo in this illustration picture

By Nakul Iyer

(Reuters) - Oil prices will stabilise above $60 a barrel level this year, as vaccine rollouts support a demand recovery and OPEC and its allies continue to rein in supply, a Reuters poll showed on Wednesday.

The survey of 48 participants forecast Brent would average $63.12 per barrel in 2021, up from last month's consensus of $59.07 and the average price so far this year of $59.36.

The benchmark was trading close to $64 on Wednesday.

"With vaccinations expected to gain pace and OPEC+ likely to keep to a cautious approach — reducing production cuts when demand recovers — we expect oil inventories to normalise by mid-year, which should support prices," said UBS analyst Giovanni Staunovo.

Oil demand was seen growing by 5 million-7 million barrels per day (bpd) this year, despite renewed COVID-19 lockdowns in Europe.

Graphic: Oil's road to recovery - https://graphics.reuters.com/OIL-PRICES/gjnpwodalpw/chart.png

Edward Moya, senior market analyst at OANDA, said the U.S. economy was recovering fast, driving global demand for oil higher despite a faltering outlook in Europe.

Central to the price recovery thesis are expectations that the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, will extend output cuts that now run into April and only modestly raise output after that.

Marshall Steeves, energy markets analyst at IEG Vantage, said $60 could prove pivotal, as above that level U.S. shale oil becomes more economical, prompting more production and putting U.S. crude back in competition with OPEC+ for market share.

Saudi Arabia could start raising output at prices above $70, but by that point U.S. output was already likely to be rising, as listed shale firms seek to boost financial returns, he said.

Graphic: U.S. oil rig count climbs to an over 10-month peak - https://graphics.reuters.com/OIL-PRICES/xklvyrynwpg/chart.png

Plans by Indian state refiners to reduce their reliance on Saudi crude poses a further test for the kingdom, which has made voluntary production cuts in addition to its OPEC+ reductions.

Sources said the refiners planned to cut Saudi oil imports by about a quarter in May.

In addition, Intesa Sanpaolo (OTC:ISNPY) analyst Daniela Corsini said: "High prices could stimulate output growth, and incentivise cheating from OPEC+" on agreed quotas.

Also, Washington could proceed with talks with Iran for a new nuclear deal. "Therefore, it's possible that Iranian exports will increase toward end-2021," she said.

OPEC cuts, vaccines to sustain oil's recovery: Reuters poll
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email