Since The outbreak of Covid,19 the climate is gradually changing around the world. Thus economically It has not only hit the underdeveloped countries but developed too. However, in this regards the Analysts have forecast higher oil demand as the global economy to be recovered faster than expected from the epidemic crisis.
Globally Oil prices rose a few cents to $80 a barrel on Monday. The highest level in nearly three years, as traders reassessed their outlook for a global economic recovery amid tightening crude supplies.
Brent crude, the world standard, ended the day at 79.60 a barrel-up to 90 percent from the previous year-and analysts predicted higher oil demand as the global economy is to hook the world off under critical crises.
Damien Corvalin, a commodities analyst at US Bank Goldman Sachs, said: “Although we have long held the view of the oil boom. The current global oil supply-demand deficit exceeds our expectations.” He said global demand for coronavirus delta from a variety of effects has been faster than previously estimated, and Goldman has raised its year-end forecast from $10 to $90 a barrel.
Christian Malek of JPMorgan reiterated his prediction of 100 per barrel, saying that all commodities go through a “Super-cycle” in prices. He said that the oil super cycle is running.
The recovery in oil prices since last spring has been due to improved global economic conditions, but also to the steps taken by OPEC+ –A coalition of producers led by Saudi Arabia and Russia – when demand was weak. ۔
Although OPEC+ has begun to reverse cuts, allowing an additional 400,000 barrels per month in 2022. Goldman said the oil market will again be in a “structural deficit” in 2023 as demand exceeds supply and investment Remained low
Despite the increase in OPEC+output quotas, it has become difficult for some major producers to meet the new limits and meet all the needs of the global market. Saudi Arabia, which has the largest spare capacity in OPEC +, will probably be a big winner due to rising prices and production.
Gas shortages in Europe and elsewhere are also likely to push up oil prices. “The risks of winter demand have now been reversed as global gas shortages will increase oil-fired power generation,” Goldman said.
The next OPEC+ meeting will decide whether to stick to the agreed increase of 400,000, but there is a problem if prices continue to rise. Some energy experts believe that US shale oil could lead to a resurgence that could eat up OPEC + market share.
West Texas Intermediate, the US standard, rose to more than $75 a barrel. A level many producers would consider sufficient to justify a resumption of drilling.
Stay tuned for further information