Very Likely Oil Will Rise Towards $70

It’s very likely that oil will claw back towards $70 per barrel in the coming months as the global demand uptick tips the scale to positive.

That’s according to Rystad Energy oil analyst Louise Dickson, who made the comment in a statement sent to Rigzone on Monday. Dickson highlighted in the statement that it was very likely the price milestone would be achieved despite a demand downside in India.

“The total demand for Indian oil products such as gasoline, diesel, and jet fuel, will plunge below the four million barrel per day threshold in May 2021 as new Covid-19 restrictions pinch mobility,” Dickson said.

“Indian oil demand below four million barrels per day is cause for concern and far below the pre-virus levels of about five million barrels per day, but still rather resilient if compared to the drop to 3.1 million barrels per day back in April 2020,” Dickson added.

“India jitters are currently stopping oil prices from rising further but, with June-delivery barrels now in focus, prices may increase on seasonal oil appetite additions and as the removal of Covid-19 restrictions in most of the world will lend more demand support,” the Rystad representative went on to say.

Dickson noted that between now and the end of June, Rystad sees oil demand jumping by at least three million barrels per day. Dickson said this will offset the India snarl, as well as be plenty to accommodate extra OPEC+ barrels.

At the time of writing, Brent crude prices stood at $68.14 per barrel. Brent closed just below $70 per barrel on several days during the first half of March.

According to the latest information from the World Health Organization, there have been more than 200,000 cases per day of Covid-19 in India since April 15, and more than 2,000 deaths per day since April 21.

To contact the author, email andreas.exarheas@rigzone.com