The price of Brent crude, which fell to $47 per barrel ahead of the OPEC+ meeting, rose to almost $50 per barrel, rebounding on positive news about the decision reached by the participants to the oil production cut agreement.
Now this is the maximum price and it is unlikely to rise in the near future, according to experts interviewed by TASS.
However, in 2021, with the beginning of mass vaccination and the passage of the peak of oil production in the United States, oil prices may rise to $60 per barrel, they note.
The decision of the OPEC+ countries to mildly increase oil production from January was greeted with optimism on the market. The price of Brent, which was declining before the meeting on alarming news about disagreements within the alliance, grew by almost $2 and exceeded $49 per barrel after the consensus was announced.
According to Finam analyst Alexei Kalachev, for the moment there are no reasons to expect oil prices to grow above $50.
“Most likely, the price will stay in the current range – $45-50 per barrel,” he says.
“Judging by the reaction, the market was waiting for the worst decision. But I admit that it could be closing of short positions,” says Andrey Polishchuk, an analyst at Raiffeisenbank.
The average oil price in the first quarter of 2021 will be $45 per barrel, the bank predicts.
The rise in oil prices was not only due to the decision of OPEC+, says Vasily Tanurkov, director of the corporate ratings group at ACRA (Analytical Credit Rating Agency).
“Stock markets are growing awaiting a vaccine. The oil market remains in short supply, stocks are slowly decreasing. In addition there is another aggravation around Iran. The OPEC + decision removed some risks of uncertainty, and this, among other things, let oil prices grow,” he explains.
Sooner or later, prices will surpass the $50 mark per barrel, analysts say. This may happen if the growth of oil consumption in Asia continues. Further dynamics will also depend on how Europe and the United States deal with the second wave of COVID, which has yet to be taken under control, says Ole Hansen, head of commodity strategy at Saxo Bank.
“By the end of 2021, oil price may rise to $60 per barrel, says Polishchuk from Raiffeisenbank. Tanurkov says that the range of $55-60 per barrel can be considered equilibrium, it is possible when oil reserves on the market return to normal volume and it will be possible to restore production in OPEC+ at a faster pace,” Tanurkov says. “Not only the start of of mass vaccination, but also the market’s awareness that the peak of shale production in the United States may have already passed, can contribute to the oil price rise,” the expert explains.