Oil Price Forecast - Jan 13

[dan_s]

The note below is from https://numeraanalytics.com/
Numera Analytics is a global provider of macroeconomic and sector research

The approval and ongoing rollout of COVID-19 vaccines continues to fuel a rotation towards assets directly exposed to away-from-home traffic. One clear winner over the past two months have been crude oil prices, up $16 / bbl since Pfizer’s original vaccine announcement. Although a $50+ barrel may appear surprising in the midst of a pandemic, the magnitude of the increase is entirely consistent with prior expectations. We can see this from the chart below, which compares our May Brent outlook to the realized price of crude oil prices over the past six months (red line). Sorry, I can't post the chart here.

Our latest projections call for further oil price gains as mass vaccination campaigns fuel a recovery in road traffic. The most likely outcome is for Brent to approach $70 / bbl by late 2021, with a 79% chance of at least marginally higher prices. Such an increase would create substantial inflationary pressures, in turn increasing the likelihood of higher long-term rates and a steeper yield curve.

Later today, we will publish the January 2021 edition of our Global Commodity Outlook, discussing our latest views on commodity markets at large.