Oil prices are likely to remain at current high levels in March and April, with Brent crude oil prices averaging between $ 65 and $ 70 a barrel, after the OPEC + group unexpectedly decided to maintain their production cuts in April. the U.S. Energy Information Administration (EIA) said on Wednesday.
In its short-term energy outlook (STEO) for March, the EIA expects Brent prices to average $ 65 to $ 70 a barrel in March and April, more than $ 10 a barrel above the February forecast, mainly due to OPEC + which is holding tight 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 the largest OPEC producer and de facto leader, Saudi Arabia, its extra savings of 1 million bpd until April. This was contrary to market expectations that the group facilitated the 500,000 bpd cut and the Saudis reversed the additional cut.
For the second quarter of 2021, the EIA sees Brent prices averaging $ 64 a barrel and then $ 58 a barrel in the second half of 2021, as it expects downward price pressures in the coming months as the oil market becomes more balanced. .
Wood Mackenzie expects oil prices to rise in the direction of $ 70- $ 75 a barrel during April, while the stock will pull significantly more than 1 million bpd next month as the summer demand season threatens.
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‘The risk is that higher prices will dampen the provisional global recovery. But Saudi Arabia’s energy minister, Prince Abdulaziz, is determined that OPEC + should pay attention to concrete signs of an increase in demand before continuing production, “said Ann-Louise Hittle, vice president, Macro Oils. Wood Mackenzie, said after the OPEC + meeting earlier this month.
Following OPEC +’s surprise decision to keep oil production flat in April, Goldman Sachs now sees Brent prices rising $ 80 a barrel in the third quarter of this year and $ 75 in the second quarter, compared to the previous estimate of just issued two weeks before.
By Charles Kennedy for Oilprice.com
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