Last week, UBS raised its Brent price forecast to $68 per barrel for the second half of this year while BofA Global Research lifted its forecast for Brent crude oil prices for this year citing tighter supplies due to the Texas freeze and Opec+ output curbs and unmatched global monetary stimulus.
"We believe this faster rebalancing during what was expected to be the dark days of winter will be followed by a widening deficit this spring as demand rebounds faster than supply, setting the stage for a tight physical market," Goldman said in a note.
Goldman now expects global oil demand to reach 100 million bpd by late July 2021 versus its previous expectation of August 2021.
BofA now expects Brent crude oil to average $60 per barrel in 2021, up from a previous estimate of $50.
BofA also forecasts West Texas Intermediate crude prices to average $57 a barrel this year.
Brent prices could temporarily spike to $70 a barrel in the second quarter of the year, the bank’s analysts said in a note.
Brent crude was up 0.4 per cent at $65.51 a barrel by 1313 GMT, and US crude rose 0.5 per cent to $62.00 a barrel.
Oil prices rose on Tuesday, helped by the likely easing of Covid-19 lockdowns globally, positive economic forecasts and lower output as US supplies were slow to return after the deep freeze in Texas shut down crude production.
“The big Texas freeze in the past week should reduce global inventories by an additional 50 million barrels, further supporting (oil) prices,” BofA said.
The bank also said Saudi Arabia’s additional, voluntary oil output cuts in February and March and the Opec+ holding production steady were also supportive.
Opec+’s supply deal that extends into the first quarter has removed an extra 180 million barrels from the market, creating more spare capacity, they said.
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