Oil prices will struggle to gain upward traction next year as demand remains in the grip of the coronavirus pandemic despite growing optimism over vaccines and a likely extension of output cuts by top producers, a Reuters poll showed on Monday.<\/p>\n
The poll of 40 economists and analysts forecast Brent would average $49.35 a barrel next year, little changed from last month\u2019s $49.76 outlook. The benchmark has averaged about $42.50 per barrel so far in 2020.<\/p>\n
\u201cThe global oil demand outlook remains precarious given the resurgence of the pandemic and resulting lockdowns in Europe and the U.S.,\u201d said Marshall Steeves, energy markets analyst at IEG Vantage.<\/p>\n
\u201cThis will likely remain the case through the first quarter of 2021 if not the second, thus OPEC+ faces muted demand for their oil.\u201d<\/p>\n
(Graphic: Brent and WTI price forecast for 2021 )<\/p>\n
Rising Libyan output also posed a headwind, analysts said, as the market focuses on a meeting on Nov. 30-Dec. 1, when the Organization of the Petroleum Exporting Countries, Russia and other producers, a grouping known as OPEC+, decide strategy.<\/p>\n
OPEC+ is leaning towards delaying the group\u2019s existing plan to boost output in January by 2 million barrels per day (bpd) to support a market hammered by the pandemic..<\/p>\n
Although an accelerating COVID-19 vaccine race has raised hopes for a quicker economic rebound, analysts said a resultant fillip to demand may only materialise in the second half of 2021.<\/p>\n
Global demand was seen growing by 5.1 million to 6.3 million bpd in 2021, led by China.<\/p>\n
\u201cCurrently the Achilles heel on the demand side is the aviation sector. Business-related travel could still be low next year, as companies may make greater use of video conference calls,\u201d said UBS analyst Giovanni Staunovo.<\/p>\n
The survey forecast U.S. WTI crude futures would average $46.40 a barrel in 2021, versus October\u2019s $46.03 consensus.<\/p>\n
\u201cU.S. rigs are coming back to life but a Joe Biden administration should derail anything that allows for a massive upswing with production,\u201d said Edward Moya, senior market analyst at OANDA.<\/p>\n
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