Brent Oil to move around $70 over the second half of the year – ING
|Oil has staged an impressive recovery – although has been mostly range-bound over the last month, with ICE Brent struggling to break above $70. There are several factors that appear to be holding the market back for the moment, however, strategists at ING expect Brent Oil to hover around $70 through the second half of 2021.
The biggest downside risk is if oil demand does not recover quickly
“OPEC+ is set to increase output by 2.1MMbbls/d over the next three months. Iran has been increasing output for much of this year, despite US sanctions, and this is a trend which is likely to continue for the remainder of the year, regardless of whether we see a quick lifting of sanctions or not.”
“The latest COVID-19 wave across India is a big worry for the oil market, given it is the third-largest oil consumer in the world. Therefore there are concerns that if the situation deteriorates further, we may see a significant hit to global demand.”
“We continue to believe that prices will edge higher as we move through the year, and still expect that ICE Brent will average US$70/bbl over the 2H21. Despite rising OPEC+ output, and also accounting for larger Iranian supply, the market is still set to draw down inventories throughout the year.”
“During these uncertain times, the biggest downside risk for the market is if oil demand does not recover as quickly as many in the market are anticipating.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.