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Oil supply will decrease markedly in the second half of the year, and demand will begin to grow in May, UBS predicts.
World oil supply surplus in the second quarter may reach about 10 million b / d, but energy demand should start to grow in May as quarantine restrictions are lifted, bank analysts write.
In the second half of the year, the bank expects a noticeable reduction in oil supply amid falling output in OPEC + and outside the Cartel. In the third quarter, the market will reach a state of equilibrium, and in the fourth there will be an oil shortage, according to UBS experts.
According to his forecast, the price of Brent oil will increase to $ 43 per barrel at the end of this year and to $ 55 per barrel at the end of June 2021.
UBS’s forecast for WTI crude oil for the middle of next year is $ 52 per barrel.
“Due to the high cost of renewing oil futures contracts and the general weakness of the market, we do not recommend holding long positions,” write bank experts. “Market investment is approaching and the current situation is reminiscent of the darkest hour before dawn.”
About the topic:
Bloomberg: OPEC oil production rose 1.73 million bpd in April, record since 1990
Global oil demand begins to recover, but will be painful and prolonged
The oil market is even weaker than many think.
