Column: Oil price forecasts fall in the wake of the pandemic | Reuters
Oil prices are expected to remain lower even once the coronavirus pandemic is over and the economy recovers.
Before a perfect storm hit the industry in 2020, medium-term price expectations had been firmly anchored around $65-70 per barrel, based on the average annual price of Brent crude.
While prices cycled higher and lower in the short term, there was a strong and resilient consensus they would return to this level over a five-year time horizon.
But the extraordinary shocks to production and consumption last year have shaken this confidence and caused most observers to cut their medium-term expectations by around $5 per barrel to $60-65.
Brent is expected to average $55-60 per barrel this year, down by $10 from a previous forecast of $65-70, as the industry gradually pulls out of last year’s slump.
By 2024, Brent prices are expected to average $60-65 per barrel, but that is still down by $5 from a forecast of $65-70 previously.
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