MOSCOW (MRC) -- Oil prices will hold near USD80 as the year ends, as tight supplies and higher gas bills encourage a switch to crude for power generation, a Reuters poll showed on Friday.
The survey of 41 analysts and economists forecast benchmark Brent crude to average USD70.89 a barrel in 2021, the highest forecast for the yr since April 2019.
It falls short of the $100 a barrel level mooted by some producers and forecasters and compares with an average price of USD69.52 so far this year.
Prices are forecast to average USD80.92 a barrel in the fourth quarter this year and USD78.74 in the subsequent quarter.
"The main factors affecting oil prices will continue to be related to the energy crunch in Europe and the switching from natural gas to oil derivatives," Matthew Sherwood, Global Economist at the Economist Intelligence Unit, said.
However, that could ease from about the middle of 2022 as the United States responds by pumping more oil, Sherwood added.
The poll forecast US crude at USD68.62 per barrel, the highest 2021 forecast since March 2017. West Texas Intermediate was seen averaging USD78.06 in the current quarter and at USD75.68 in the first quarter of 2022.
Analysts estimate global fuel demand to increase by 5-6 MM barrels per day (bpd) this year.
Both crude benchmarks are trading near multi-year highs, boosted by an ongoing supply squeeze across the globe as demand has largely returned to pre-pandemic levels. This has also contributed to soaring coal and natural gas prices.
Additionally, the emergence of more COVID variants, the Iran nuclear deal and central banks' response to rising inflation driven by spiking energy prices will be crucial factors in the coming months, analysts said.
As MRC informed before, US commercial crude stocks fell 3.48 million barrels to 413.96 million barrels in the week ended Sept. 17, to more than 8% below the five-year average, Energy Information Administration data showed. Stocks were last lower Oct. 5, 2018.
We remind that in late August, 2021, US crude stocks dropped sharply while petroleum products supplied by refiners hit an all-time record despite the rise in coronavirus cases nationwide, the Energy Information Administration said. Crude inventories fell by 7.2 million barrels in the week to Aug. 27 to 425.4 million barrels, compared with analysts' expectations in a Reuters poll for a 3.1 million-barrel drop. Product supplied by refineries, a measure of demand, rose to 22.8 million barrels per day in the most recent week. That's a one-week record, and signals strength in consumption for diesel, gasoline and other fuels by consumers and exporters.
We also remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, the US Energy Information Administration (EIA) said in a monthly report, a smaller decline than its previous forecast for a drop of 210,000 bpd.
MRC