Barclays expects the U.S. oil benchmark, WTI Crude, to average $52 per barrel in 2021, raising its outlook by $2 a barrel due to a weaker U.S. dollar and expected higher demand for winter fuels because of the cold snap in the northern hemisphere.
The bank also lifted its view on the average Brent Crude price for this year by $2 per barrel, expecting it at $55, Reuters reported on Monday.
The new forecasts are roughly the levels at which both benchmarks traded early on Monday, with WTI Crude at just above $52, and Brent Crude at $55.50.
Barclays is more bullish on oil prices in the second half of this year, while for the first half, it still sees downside risks such as expanding Chinese lockdowns to fight resurging COVID cases.
Nevertheless, "the COVID-19 shock, despite its acute effects on mobility demand, does not appear, at least for now, to have materially affected the oil supply-demand continuum," Barclays said, as carried by Reuters.
Transportation demand for oil is set to normalize by the end of this year, thanks to vaccinations and freight demand with fiscal stimuli around the world, according to the bank.
The OPEC+ group is forecast to ease the cuts by 1.5 million barrels per day (bpd) in total during the second quarter of the year, while the alliance is also expected to release another 1.5 million bpd of oil on the market in the second half of 2021, Barclays says.
Goldman Sachs is also bullish on oil this year, seeing oil prices supported by the upcoming massive economic stimulus package in the United States and the low probability of much Iranian oil returning to the global market.
Goldman Sachs has been bullish on oil since the end of last year, seeing Brent Crude averaging $65 in 2021.
Apart from a stronger economy in the United States this year, the U.S. investment bank expects that the issue with the Iranian nuclear deal will not be resolved soon.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More