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Cordros Research forecasts 6% crude oil demand growth in 2021, oil prices to average US$68- US$73 /bbl

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bY Audrey Lotechukwu

MON 28 JUNE, 2021-theGBJournal- Cordros Research says they remain optimistic that global demand will maintain its rebound, albeit below pre-pandemic levels, forecasting a 6.0% growth for demand in 2021 on expected improved growth from top consumers US and China.

The research analysts also expects oil prices to average USD68.00 – 73.00/bbl in 2021, given current market dynamics, future expectations and factoring in the speculative elements that impact the market.

On supply, Cordros expects a steady increase in production, as OPEC and its allies confirmed in their monthly meeting in June, to gradually increase outputs to keep pace with the rising demand and prices, noting the potential of increased outputs from Iran, as the country is currently in discussions with several developed countries to revive its 2015 nuclear deal.

If successful, sanctions preventing Iran from increasing its output will be lifted. However, OPEC has downplayed the effects of Iran’s increased output and noted that it expected Iran to act “constructively” as higher prices also favour the producer.

Also, there is the possibility that the rally in WTI will entice US shale producers to increase production.

Crude oil consumption in the year so far has been higher relative to last year, following the faster-than-expected recovery from the depths induced by the pandemic.

The US Energy Information Administration (EIA) estimates that the world consumed about 96.22 mb/d of crude oil in May 2021, a 4.3% increase from last year’s average.

Cordros noted however, that the recovery in demand was uneven, as re-instituted lockdowns in Europe and most recently Asia (especially India) due to renewed outbreaks of the pandemic slowed the demand for crude in these regions.

Meanwhile, China’s consumption grew rapidly this year, following a strong rebound in economic activities.

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