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July 30 (Reuters) – Oil prices will trade near $ 70 a barrel for the remainder of the year, supported by the global economic recovery and a slower than expected return of Iranian supplies, with limited further gains by new coronavirus variants, a Reuters poll showed on Friday.
The survey of 38 participants predicted that Brent would average $ 68.76 per barrel, up slightly from the June estimate of $ 67.48. Brent has averaged around $ 66.57 so far this year.
“The rise and fall of COVID-19 waves will have more influence on sentiment rather than supply and demand fundamentals during the rest of the year, as we no longer expect that politicians are imposing harsh and widespread lockdown measures, “said Carsten Menke, analyst at Julius Baer.
“Oil policy will remain another source of volatility, especially if prices exceed in the summer, which would increase pressure on producers to respond.”
Earlier this month, the Organization of the Petroleum Exporting Countries and allies like Russia, collectively known as OPEC +, agreed to increase oil supply by 2 million barrels per day (bpd ) from August to December 2021, after prices hit almost 2.5 years. Tops.
While analysts were divided over oil’s potential to hit $ 80 a barrel, they agreed the level was unsustainable.
“With the increase in OPEC + production, a possible return of US production in the second half of 2021, and COVID-19 still threatening to dampen oil demand, I think $ 70 is a more realistic level for the country. oil, “said Frank Schallenberger, analyst at LBBW.
As OPEC and the International Energy Agency expect demand to reach pre-pandemic levels in 2022, countries in Asia, including China, are once again restricting movement to curb the increase in COVID-19 cases.
Oil prices should also be supported this year by a delay in the return of “generic” oil supplies from Iran, which is awaiting the lifting of US sanctions.
“It seems likely that Iran will now be a 2022 story, raising the outlook for the oil market in the near term, but possibly softening the trajectory in 1H-2022,” said Suvro Sarkar, analyst at DBS Bank.
Reporting by Eileen Soreng in Bangalore; Editing by Sonali Paul
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