American investment bank Goldman Sachs said that Brent crude oil prices would average $55/barrel in 2021, while US WTI crude prices would average $52.8/barrel. These projections are lower than the bank’s previous forecast of Brent at $59.4/barrel and WTI at $55.9/barrel next year. Goldman Sachs said the reimposed lockdowns due to resurging COVID-19 cases would result in a 1 million bpd surplus at the end of 2020.
According to the bank, this will prompt OPEC to roll over its existing production cuts in January by three months. The coordinated supply curbs will result in a 0.9 million bpd deficit in the January-March quarter of next year, the bank said. Hence, Brent is expected to resume their rally in the first three months of 2021 and average $47/barrel in the period. Brent is expected to rise to $65/barrel during the autumn of 2021 or early 2022. However, Joe Biden may reach a new nuclear agreement with Iran which leads to the near full return of Iranian exports in 2022.
