December 25. What awaits the oil market in 2021?
The outgoing year will be remembered for numerous anti-records: a fall in demand by 25%, overcrowding of oil storage facilities and a drop in prices for the first time in history. The reason for such events was the coronavirus pandemic in the world, which led to an unprecedented drop in oil prices: Brent collapsed to the level of $15 per barrel, and for the first time in history, WTI completely went into negative territory, reaching minus $40 (suppliers paid extra to buyers for oil export).
However, experts believe that next year will be more successful for «black gold», and the price of a Brent barrel will remain in the region of $45-55 per barrel. By the end of 2020, OPEC's coordinated efforts to balance the oil market, as well as news of the successful testing of vaccines against COVID-19, helped the oil rise to $50 per barrel.
The demand for oil products in the outgoing year is gradually approaching 97-99% of 2019, but air traffic has not yet been restored. Moreover, the new mutation Covid casts doubt on the imminent opening of borders. At the same time, the world economy continues to grow, which was facilitated by the stimulating programs of central banks. In such conditions, an optimistic scenario for further dynamics of the oil market is still more likely, experts say.
It should be added that the negative effect on demand from the pandemic will come to naught by the end of the first half of 2021, and the OPEC+ deal will remain in one form or another. However, in the unlikely scenario of canceling the agreement to cut oil production, the price of «black gold» may fall to the range of $35-45 per barrel. But, again, this is extremely unlikely.