RBC Capital Markets - Oil Price Forecast Feb 18
Posted: Thu Feb 18, 2021 7:12 pm
Oil Strategy: Conceptualizing a Re-Rating of the Back End of the Curve
With a line of sight to global stockpiles returning to normal by this summer, an increasing call on
OPEC on the horizon, and perhaps even a call on US shale on deck for next year, the trajectory
of oil balances and prices are arguably the most constructive in years.
We anticipate firming oil prices with WTI and Brent averaging $61.50/bbl and $64/bbl this year.
Our bull case has WTI overshooting $70/bbl by year-end (see Figure 9). The most impactful part
of our forecast is the re-rating of the forward curve. Our base case has WTI and Brent averaging
$63/bbl and $66/bbl in 2022, or 15–20% appreciation from current strip pricing.
With a line of sight to global stockpiles returning to normal by this summer, an increasing call on
OPEC on the horizon, and perhaps even a call on US shale on deck for next year, the trajectory
of oil balances and prices are arguably the most constructive in years.
We anticipate firming oil prices with WTI and Brent averaging $61.50/bbl and $64/bbl this year.
Our bull case has WTI overshooting $70/bbl by year-end (see Figure 9). The most impactful part
of our forecast is the re-rating of the forward curve. Our base case has WTI and Brent averaging
$63/bbl and $66/bbl in 2022, or 15–20% appreciation from current strip pricing.