(Reuters) – Oil prices will stay near current levels this year as rising novel coronavirus cases threaten to slow the pace of demand recovery and counter output curbs by top producers, a Reuters poll showed on Wednesday.
The survey of 40 analysts and economists forecast benchmark Brent crude LCOc1 averaging $42.48 a barrel in 2020. That compares with an average of $42.54 this year and last month’s forecast of $42.75.
Brent is projected to average $50.41 in 2021.
The 2020 U.S. crude CLc1 price outlook was at $38.70 per barrel versus $38.82 predicted in August. It has averaged $38.20 this year.
“As long as there is no working vaccine available, the main risk for oil prices is lower-than-expected demand,” Hans van Cleef, senior energy economist at ABN Amro said.
(Graphic: Oil demand and COVID-19 cases – )
Global demand was seen contracting by 8 million-9.8 million bpd (barrels per day) this year, slightly less bleak than the 8 million-10 million bpd consensus last month.
“Demand recovery should still continue in our view, although at a slower pace with the easiest demand gains behind us,” said UBS analyst Giovanni Staunovo.
The recovery “will remain uneven”, he added.
Brent prices are on track for their first monthly decline in six as rising coronavirus infections across many regions, including Europe and the United States brought new restrictions, while global cases surpassed 33 million. [nL8N2C60GZ]
The International Energy Agency this month cut its 2020 demand forecast by 200,000 bpd to 91.7 million bpd. [nL8N2GC1RP]
But production cuts led by the Organization of Petroleum Exporting Countries (OPEC) and its allies will offer some support to prices, analysts said, with the group curbing output by 7.7 million bpd. [nL5N2EM3Z3]
“We suspect compliance with the OPEC+ deal will remain patchy but doubt that this will prevent the group from extending or even deepening its output cuts later this year,” Capital Economics analyst Caroline Bain said.
Reporting by Anjishnu Mondal and Eileen Soreng in Bengaluru; Additional reporting by K. Sathya Narayanan; Editing by Noah Browning and Robert Birsel