Barclays Commodities Research said on Thursday oil costs might see a correction within the near-term if a recovery in gas demand slows additional, particularly within the United States.
While a current rally has been supported by faster-than-expected rebalancing of provide and demand as nations reopen their economies, producers minimize manufacturing and the US greenback weakens, “we are not there yet in terms of fundamentals for the next leg higher,” analysts on the financial institution said in a note.
Benchmark Brent crude costs have rebounded to round $44.50 a barrel, after plunging in April to $15.98, the bottom since 1999.
However, features have been tempered over the previous couple of days by a shock construct in US crude oil shares, whereas a surge in new coronavirus circumstances continued to dampen a recovery in gas demand.
The financial institution lowered its oil market surplus forecast for 2020 to a mean 2.5 million barrels-per-day (bpd), from 3.5 million bpd beforehand.
“We expect a continued supply deficit in oil markets to normalize inventory levels by the end of next year,” the financial institution said, including, costs might doubtlessly spike if demand recovers extra shortly than expected.
The financial institution additionally said that it stays constructive on costs for 2021, forecasting $53 and $50 for Brent and WTI, respectively.
Barclays expects Brent to common $41 in 2020 and WTI to common $37.
The financial institution lowered its demand estimates for subsequent year, citing the continued sp of the coronavirus in key consuming nations, particularly the United States.