Crude oil’s strong vaccine-led rally since early November has taken Brent crude oil back above $50 per barrel, and the foundation for higher prices later in the year has been established, economy experts noted.
With global oil demand still running close to 6 million barrels/day below pre-pandemic levels, we do not see a material upside risk to oil prices before 2022 or even 2023. On that basis, we see Brent crude oil trading steady in the mid to low 50s during the quarter, they said.
In General, Saxo Bank noted that a weak USD, vaccine-led recovery in global demand, and emerging weather worries set the stage for a commodity supercycle.
We expect the broad commodity rally that saw the Bloomberg Commodity Index rise by 10% during the last quarter to extend further into 2021, driven by multiple tailwinds from tightening supply and a global market flushed with cash, says Ole Hansen, head of Commodity Strategy at Saxo Bank.