Strong economic recovery in the U.S. and global oil pick-up looks hopeful for investors, raising their expectations.
However, according to energy analyst Vandana Hari, these expectations might be overly optimistic.
Several U.S. states have moved COVID-19 restrictions and regulations, meaning that normalcy is gradually returning to the country.
According to Vandana Hari, the U.S. mobility and macroeconomic indicators are going “gangbusters.”
The U.S. has been one of the first countries, starting solid and fast COVID vaccination. That robust procedure has been a vital indicator of the U.S. economy’s reopening.
According to statistics, more than half of the U.S.’s population has already taken at least one dose of vaccine by July 3.
The Oil Market Started Using the U.S. Recovery as A Model for The Rest of The World
Wealthier nations are following the U.S. model and proceeding fast and effective vaccination for economic reopening. However, in most developing countries, COVID cases continue to increase and fail to follow the U.S. path.
According to Hari’s prediction, the oil price might range between $80 and $100 in 2021-2022.
However, Hari says that Brent oil prices might remain the same and range between $70 and $75, at least in summer.
On Monday in Asia, Brent crude futures were traded at $76.09 per barrel, a 0.11% drop.
U.S. crude futures prices were also traded lower by 0.12%, at $75.07.
Failed oil production decisions by OPEC+ and its allies influenced the oil price.
The organization held a meeting on Thursday and Friday to revise the oil output agreement.
However, due to the UAE’s opposed position, they didn’t make the decision. The group postponed its meeting to Monday to review its oil production policy once more.
International benchmark Brent has increased by more than 45% since the beginning of 2021. Simultaneously, Nymex is up by 55%, which is higher year-to-date.
Hari acknowledges oil prices’ downside risks, as she sees lots of uncertainties and concerns. She even supposes that by the second half of 2021, the world still won’t be near to mass immunity.