Oil prices are likely to remain at their current high levels in March and April, with an average price of Brent crude oil between $ 65 and $ 70 a barrel, after the OPEC + group unexpectedly decided to maintain their production cuts in April, said the US Energy Information Administration (EIA). 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 + keeps a tight grip on production in April.
Earlier this month, the OPEC + alliance decided not to increase production from April, with the exception of small increases for Russia and Kazakhstan, while OPEC’s top producer and de facto leader, Saudi Arabia, added an additional 1 million barrels per day in April. This was against market expectations, which aimed to have the group relax the cuts by 500,000 bpd and the Saudis to reverse the additional cut.
For the second quarter of 2021, the EIA expects Brent prices to average $ 64 per barrel and then average $ 58 per barrel in the second half of 2021 as it expects downward price pressure to emerge in the coming months as the oil market is becoming more balanced.
Wood Mackenzie expects oil prices to rise to $ 70- $ 75 a barrel in April, with stock pulling significantly over 1 million bpd next month as the summer demand season approaches.
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“There is a risk that these higher prices will dampen the cautious global recovery. But Saudi Energy Minister Prince Abdulaziz is adamant that OPEC + should be on the lookout for concrete signs of rising demand before moving forward with production, ”said Ann-Louise Hittle, Macro Oils vice president at Wood Mackenzie after the OPEC + meeting earlier this. month.
Following OPEC + ‘surprise decision to maintain oil production in April, Goldman Sachs now sees Brent prices hit $ 80 a barrel in the third quarter of this year and $ 75 in the second quarter, up by $ 5 compared to the previous forecast released just two weeks earlier.
By Charles Kennedy for Oilprice.com
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