OPEC rotating president and Energy Minister of Algeria, Mohamed Arkab, believes oil prices will rise to $40 per barrel following the implementation of the OPEC+ output cut deal on May 1.
Speaking during an interview on the country’s national radio channel on Sunday, Arkab said in recognition of a gradual economic recovery triggered by the lifting of the coronavirus lockdown, “the global economy is not going to stay paralyzed.”
He pointed to the recovery in China and said the normalization of the country’s transportation sector “is driving up global demand.”
US Energy Information Administration (EIA) forecasts OPEC crude oil production will average 29.2 million b/d from April through December 2020, up from an average of 28.7 million b/d in the first quarter of 2020.
EIA’s forecast assumes the demand effects from COVID-19 will diminish by the third quarter of 2020, with demand growth resuming its previous trend through the remainder of the forecast.
The energy agency forecasts Brent crude oil prices will average $43/bbl in 2020, down from an average of $64/bbl in 2019. For 2020, EIA expects prices will average $37/bbl during the second quarter and then rise to $42/bbl during the second half of the year. EIA forecasts that average Brent prices will rise to an average of $55/bbl in 2021, as declining global oil inventories put upward pressure on prices.
