Brent is trading c. $66/bbl, even as OPEC+ commits to unwinding cuts and India and Brazil are ravaged by COVID-19- We increase our Brent annual average forecast to $63.85/bbl in 2021 (+$3.84/bbl on previous), with increasing IMF GDP growth estimates underpinning a better demand outlook
- Our 2021 demand growth forecast rises slightly to +6.03 million b/d (+150,000 b/d on previous), as the US recovery currently outweighs the effects of India and Brazil
- OPEC+ surprised the market on 1st April by announcing an unwind of its cuts, nominally returning 2.1 million b/d over the next three months
- This bodes well for the continuance of the group, as it will bring Russian and Saudi quotas back to parity, easing political tensions
- Deepwater exploration continues to recover and will pick up markedly in 2H21, with fixture rates improving in many basins
- We nevertheless decrease our 2021 supply growth forecast to 3.12 million b/d (-200,000 b/d on previous), as delays to project start-ups in Brazil weigh
- We see the market in deficit by 690,000 b/d in 2021, as demand recovers two thirds of its 2020 losse...
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by Graham Walker // 30 April, 2021
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