Rising new coronavirus cases are causing the pace of demand recovery to remain low and supply not being able to increase. Oil prices appear to remain close to current levels this year.
Analysts and economists forecast benchmark Brent crude LCOc1 averaging $42.48 a barrel in 2020. That compares with an average of $42.54 this year and last month’s forecast of $42.75.
Brent is projected to average $50.41 in 2021.
The 2020 U.S. crude CLc1 price outlook was at $38.70 per barrel versus $38.82 predicted in August. It has averaged $38.20 this year.
Unless a working vaccine is found, the main risk for oil prices is demand keep remaining lower than expected.
Global demand is slightly less pessimistic than last month’s forecast of 8 million to 10 million barrels, this year it has narrowed to 8 million to 9.8 million barrels a day.
Investors want the recovery in demand to continue, albeit at a slow pace. Recovery is uneven and is thought that will remain irregular.
Increasing coronavirus infections in many regions, including Europe and the United States, brought new restrictions, while global cases exceeded 33 million. Brent is on his way to his first monthly decline in six months.
This month, the 2020 demand forecast was revised to 91.7 million barrels, down as 200,000 barrels per day.
There is concern that compliance with the OPEC + agreement will remain irregular. This is suspected of hampering any support the group could receive to expand or even deepen production cuts later this year.