Analysts have raised their Brent oil forecast for 2021

On May 10, oil surged after a cyberattack forced the shutdown of top fuel pipelines in the United States. It raised concerns about supply disruption, outweighing increasing COVID-19 infections in Asia.

Brent crude surged by 69 cents, which equals 1%, and settled at $68.97 a barrel. Meanwhile, U.S. West Texas Intermediate crude gained 61 cents, or 0.9%, and touched $65.51. Both benchmarks soared by over 1% last week, their second consecutive weekly gain.

Notably, analysts at Fitch Solutions Country Risk & Industry Research have raised their average Brent oil price forecast for 2021. The firm’s latest oil price outlook report has been revealed.

The analysts now see Brent averaging $66 per barrel in 2021, up from the forecast of $64 per barrel made in the group’s previous oil price report published in March.

According to analysts, the forecast indicates rest of year average of about $68 per barrel, broadly flat from spot.

Analysts also announced that strong economic data out of China and the U.S. and increasing vaccination rates cause optimism. Still, coronavirus-related risks continue to overflow, most recently evidenced by the outbreak in India.

Fitch Solutions analysts announced in the May report that a sustained break above the $70 per barrel level would likely trigger an upgrade to the company’s forecast. Still, they believe that Brent will fail to break resistance under current market conditions.

Goldman Sachs predicted Brent would reach $80 and WTI $77 within six months

Brent crude has increased over 30% in 2021 due to supply cuts by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, and easing COVID-19 movement restrictions in the United States and Europe.

Furthermore, Indian COVID-19 infections and deaths held close to record daily peaks.

According to some analysts, oil demand may never reach pre-pandemic levels; Goldman Sachs announced it expected this by the end of the year and predicted Brent would reach $80 and WTI $77 within six months.