Barclays raises 2021 forecast for Brent and WTI

Quantum Commodity Intelligence - Barclays Bank has upped its forecast for Brent and WTI Thursday amid the steady rollout of vaccinations globally that it is hoped will mitigate the threat posed by coronavirus variants.

The British bank sees Brent averaging $69/b over 2021, up from its previous forecast of $66/b, and WTI averaging $67/b, up from $62 previously, and it sees a slow grind higher for prices over the next few months, according to media reports.

Barclays expects the OPEC+ group to roll out its planned 400,000 bpd of extra supply every month from August until the end of the year to keep a lid on prices.

However, the bank cautioned; "Oil prices could rise to $100/b over the coming months if OPEC+ is too slow in bringing back supplies, given the relatively inelastic non-OPEC+ supply response."

"But we doubt the group would review it as an optimum outcome given the potential for significant demand erosion and political considerations," it added. 

The 2021 forecasts include the first and second quarters when crude prices were lower.

Next year, Brent will average $68/b and WTI will average $65/b as more supplies return to the market, the bank expects.

Barclays doubts OPEC+ will be able to limit supply growth to 400,000 bpd a month beyond 2021 if Iranian supplies increase significantly following a potential nuclear deal.