D.he oil price has risen significantly this week. A recovery that began at the end of April 2020 after the outbreak of the corona pandemic and the associated economic worries caused oil prices to slide by up to three quarters will continue in the new year. North Sea Brent crude oil cost around $ 55 per barrel (around 159 liters) at times on Friday.
The price is thus at the same level as it was last a good ten months ago. Since the beginning of the year, crude oil has become around 6 percent more expensive. Since the annual low (around $ 16) on April 22, the price increase has now been a good 240 percent. The balance sheet for 2020 as a whole was still negative with a minus of 22 percent.
In addition to the overall increase in economic confidence in the course of the past year despite Corona, the prospect of nationwide corona vaccinations in particular has caused the price of oil to rise sharply since autumn. Most recently, Saudi Arabia decided to cut oil production significantly for the time being. Nevertheless, the greatest risk for the market for the foreseeable future remains the corona crisis, especially since the situation has worsened again in many countries, with corresponding consequences for the economy and oil consumption.
In the annual F.A.Z. The 20 financial institutions surveyed were therefore rather cautious in their forecast for the oil market. On average, these experts expect the Brent variety to cost just $ 50 by mid-year. From the current perspective, this would amount to a decrease of 9 percent. At the end of the year, the analysts surveyed expect an average oil price of $ 55, which is roughly the current level.
With a forecast of 60 dollars in twelve months, Klaus Bauknecht, chief economist at IKB Deutsche Industriebank, is more optimistic. The economic recovery over the course of the year and brightening expectations should support the oil price in 2021. If this prediction is correct, this would correspond to a price increase of 9 percent.
Helaba is even more confident with a target of 64 dollars at the end of the year (plus 16 percent). The economic recovery in the world is causing an increase in oil demand. The oil-producing countries of OPEC + are trying to expand the offer only slowly in order to contribute to a reduction in inventories, which have increased significantly in the Corona crisis, it says. As a result, the outlook for the oil price is pointing upwards. The devaluation of the dollar is also having a positive effect.
Particularly low forecasts come from the Italian Unicredit and the Austrian RBI with 45 dollars at the end of the year (minus 18 percent). Commerzbank is also one of the pessimists. In the past ten weeks of trading, there has only been a weekly decline, which was also comparatively small, says Carsten Fritsch, the bank’s raw materials analyst. This illustrates the strength of the oil market over the past two and a half months. Initially, it was hopes on the demand side because of the availability of vaccines that triggered the price hike, and this week there were reports on the supply side.
With Saudi Arabia’s voluntary production cut, the oil market is likely to have a supply deficit of more than a million barrels a day in the current quarter, says Fritsch. The demand could be weaker by this amount before the market turns into a surplus. In the second quarter, however, the situation is reversed, then there is a threat of a surplus of 500,000 barrels a day if Saudi Arabia withdraws the production cut in April as announced and OPEC + gradually increases its production as planned. Then a stronger demand is necessary to prevent a surplus. This environment speaks for a price correction in the coming months.