Global crude oil prices are expected to be range-bound and between $40-50 a barrel in 2021, as major oil producers have decided on a modest output rise from January that earlier anticipated, analysts have said on the emerging oil pricing scenario.
The news of a successful coronavirus has ignited the oil market again with crude price moving up more than 20 per cent in a month to hover close to $50 a barrel now.
However, analysts believe oil prices may not see any big rise even in 2021 as demand conditions continue to remain below the peak levels.
The OPEC + decision now not to go for any big-time increase in oil production in first two quarters of 2021, any major price fall of crude has been averted and crude may be range-bound even in 2021.
According to a report by ICICI Securities, supply deficit of crude would be in the range of 0.5m b/d in Q1CY21E and 0.2-2.8m b/d in Q2-Q4CY21E as OPEC+ has decided to raise output by just 0.5m b/d in January 2021 and by not more than 0.5m b/d in later months and only after deliberations.
This would prevent an oversupply of oil and keep oil prices from a big crash as witnessed early this year.
OPEC was to prune output cuts from 7.7m b/d to 5.8m b/d from January 2021.
