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OILUKJUN21 – Brent Crude Oil (June)
OILUSJUN21 – WTI Crude Oil (June)
Crude oil reacted very calmly to the OPEC+ decision to proceed with plans to add more barrels from May and onwards while a surprise 4.3-million-barrel increase in oil stocks reported by the API was offset by equally large reductions in fuel stocks.
Despite a virus resurgence in Asia, led by India, which may cut the short-term demand outlook for fuel, OPEC+ still expects world oil demand will rebound by 6 million barrels/day this year. Agreeing with this assumption we find Goldman Sachs who sees 80 dollar oil within six months based on expectations for the biggest demand increase ever seen for a six month period. With these expectations in mind OPEC+ agreed to proceed with its roadmap for increasing output by 2 million barrels/day over the next three months.
While demand is expected to rise strongly, the persistence of Covid-19 cases rising in a number of countries, most noticeable in India and Latin America, raise the risk of another false start as already seen on a couple of occasions in December and March.