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Expect Brent crude to be around $51-52 per barrel in 1st half of 2021, says Wood Mackenzie’s Sushant Gupta

Monday, 25 January 2021 | 01:00

Biden administration will be less interfering in day-to-day affairs of the oil market compared to the Trump administration, said Wood Mackenzie’s Sushant Gupta on Thursday.

Speaking with CNBC-TV18, Gupta said, “The new administration in the US will be very interesting and will impact the oil market in a number of ways. Biden will be less interfering in day to day affairs of oil market compared to Mr. Trump who was active in the oil market particularly in and around the OPEC meetings.”

On the future of US-Iran negotiations, he said, “We do not expect the immediate lifting of sanctions, but a more diplomat approach to join back the nuclear deal and the time Trump has left he has put in more new sanctions on situations making it more complex in terms of sanctions. So it will take time for Biden administration to renegotiate with Iran and that will take time.”

Gupta added, “Also all eyes are focused on US-China relationship, their phase I trade deal with China which was signed on January 2020. We think it will be difficult for China to meet the deal so it will be interesting to see how Biden administration starts to renegotiate this deal.”

On crude demand and prices, Gupta said, “Vaccine deployment has started in major economies and for 2021 based on our assumption, we assume global demand increases by 6.3 million barrels per day by end of 2021. With this positive demand story, there are a lot of downside risks, there are lots of uncertainty around the demand recovery because of the emergence of new COVID variant and containment measures etc.”

A demand-induced solid recovery is possible in the second half of the year, he said.

“We do look at a tighter market for 2021 particularly in the second half of 2021 so oil prices roughly stay at around on an average $51-52 per barrel for Brent in the first half of 2021 and see a solid recovery in the second half of 2021 when the demand recovers.”
Source: CNBC

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