The chief economist of Bank Leumi estimates that this year we will not see a return to full activity in the world. • Accordingly, the price of a barrel will rise to $ 55, from 48 today.
The oil market was greatly affected by the Corona crisis
Photography:
Reuters
The price of oil is expected to rise, although it will not return to pre-epidemic levels, according to Dr. Gil Baffman, Leumi's chief economist. .
"If the compliance data is positive and the vaccine proves to be effective and safe against the mutations of the virus as well, then we estimate that the price of oil is expected to rise during 2021 to about $ 55 a barrel."
Now the price of oil is around $ 48.
Befman further notes that a survey by the Fed (US Federal Reserve) in Dallas shows that activity in the oil and gas sector increased during the last quarter of 2020, and about half of the oil producers surveyed expect improvement during 2021.
Oil producers also noted less uncertainty around their forecast for the next quarter compared to the last quarter of 2020, and the Fed's uncertainty index reached its lowest level since 2017.
This week, OPEC + countries - a forum of 14 major oil producers from the Middle East, South America and Africa - will meet.
"Russia's deputy prime minister said in the second half of December 2020 that during the meeting Russia would support further easing of production quotas and increasing oil production by group members in early February by an additional half a million barrels a day," the national economist said. Production quotas are expected to increase oil production by half a million barrels a day, with Russia's production quotas rising by 125,000 a day.
"However, some OPEC members tend to be more conservative and want to examine the market carefully, due to the fragility of market demand against the background of the continued spread of the corona virus."