Oil prices in 2021 to rise by around 60% to $65.68 per barrel — IMF

At the same time, the forecast’s authors believe that in the long term, there will be a situation when prices will decline

The average oil price in 2021 is expected to be almost 60% higher than in 2020 and reach $65.68 per barrel, according to the October report of the International Monetary Fund (IMF) published on Tuesday.

Thus, the IMF retained its July forecast for the rise in oil prices in 2021. In 2022, according to fund analysts, the oil price will reach $64.52 per barrel and it will remain unchanged in real terms over the medium term, the report said. The IMF pointed out that in 2021 the price of oil will be 59% higher than the average in 2020 when it reached $41.29 per barrel.

At the same time, the forecast’s authors believe that in the long term, there will be a situation when prices will decline – to $56.3 per barrel in 2026.

According to the report, the factors that may contribute to the growth of oil prices in the short term are the declining level of global oil output due to falling investments over the past year, as well as the continued support of prices by OPEC+. At the same time, factors that can lead to a decrease in prices may be an even wider spread of the new coronavirus strain and a greater level of production from Iran, Libya, and Venezuela, as well as an increase in shale oil production in the United States.

The IMF also noted skyrocketing gas prices in 2021. According to experts, the rise in oil prices led to an increase in demand for coal. However, in the long term, according to their forecasts, natural gas, rather than coal, is likely to be in high demand against the backdrop of plans to reduce greenhouse gas emissions.