DBS Bank strategists raise their oil price forecasts for the coming quartersas the winter months could see a higher demand for oil due to switching to gas for heating purposes.
Oil markets look far beyond concerns in China
“Taking into account the increase in gas prices and the possible increase in oil demand from 0.5 to 1.0 mmbpd in the short term of fuel change requirements, we have revised upwards our oil price forecasts for the next few quarters . Therefore, our average Brent crude price forecast for 2021 now stands at $ 67-72 / barrel (versus $ 65-70 / barrel before) and our 2022 average Brent crude price forecast is raised to $ 70-75 / barrel (from $ 67-72 / barrel before).
“China’s oil imports likely to be weaker than expected in the second half of 2021, due to lockdowns related to the Delta variant outbreak and the Evergrande contagion fear, but the oil market remains well supported by demand from other parts of the world, with global oil inventories very below five-year average levels and a persistent month-over-month decline. “
“The supply side raises limited concerns as internal disagreements within OPEC, and supply cuts linked to Gulf of Mexico hurricanes have been resolved provide more support in the short term. “