The International Monetary Fund (IMF) said in an updated forecast that oil prices are expected to average just above $50/b in 2021, a more than 21% rise from 2020’s depressed level, as the rollout of vaccines and fiscal stimulus programs will help the global economy post a stronger-than-expected recovery from the pandemic.
The IMF’s projections could see new oil producer Guyana earning around US$50 million from each cargo exported by the government, representing its share of crude from the Liza Phase 1 Development.
Last year the country earned around US$200 million from oil sales and royalty having exported 4 million barrels of oil from four lifts. A production shortfall had prevented the scheduled 5 oil lifts that was slated for the government.
Speaking to OilNOW in November, Natural Resources Minister, Vickram Bharrat had said, “I don’t see how a fifth lift is possible this year. But we’re going to push them [ExxonMobil] next year [2021] to make up for the one lift that was supposed to be completed this year, based on the agreement.”
S&P Global Platts said Tuesday the IMF now expects global GDP to grow 5.5% in 2021, after a 3.5% contraction in 2020. The 2020 figure has been revised up 0.9 percentage point from the previous forecast issued in October, while the 2021 estimate is a 0.3 percentage point upward revision.
“Oil exporters and tourism-based economies face particularly difficult prospects given the subdued outlook for oil prices and expected slow normalization of cross-border travel,” the IMF said.
According to Platts, the IMF uses a simple average of prices of Brent, Dubai and WTI to calculate its oil prices. With that methodology, the IMF said oil prices averaged $41.29/b in 2020 and would rise to $50.03/b in 2021, before falling back to $48.82/b in 2022.
