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Oil outlook for 2021: Price projected to reach $80

Oil outlook for 2021: Price projected to reach $80

As per the 15 Feb 2021 data, at the Inter Continental Exchange Futures Europe (ICE Futures Europe) in London, Brent crude oil price amounted to $ 66.88 (- 0,16) per barrel, while at the York Mercantile Exchange (NYMEX), Light Sweet oil hit $ 63.53 (+ 0.31) per barrel. 

Khayal Ahmadzadeh, CEO of SOCAR Trading SA, a Swiss subsidiary of the State Oil Company of Azerbaijan (SOCAR), said that this year, the price of a barrel of oil will reach $80, as oil demand will rise again. Still, producers will not respond immediately to the necessary proposals,  

According to him, in 2020, the excess oil reserves created in response to the pandemic will be entirely exhausted by summer:

"During this period, the rapid growth in the price of steel used in the production of pipes, wells, and fittings and the high capital cost for producers will prevent a meaningful supply response from the already difficult industry, despite the return of demand."

"I will not be surprised if I see oil in the spring or until the end of the year above $80 and $100 per barrel in the next 18-24 months," Ahmadzade said.

Ahmadzadeh also said he expects the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, to gradually increase production and return to full capacity as soon as possible. However, he said that would not be enough.

Azeri LT CIF crude oil, exported from Azerbaijan to the world markets, has risen by $0.21 (0.32%), settling at $66.98 per barrel.

The lowest price for Azeri Light was recorded on April 21, 2020 ($15.81), and the all-time high of $149.66 was fixed in July 2008.

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