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S&P raises oil price assumptions

18 June 2021 10:04 (UTC +04:00)

S&P Global Ratings (S&P) raised its West Texas Intermediate (WTI) and Brent crude oil price assumptions for 2021 from $55 per barrel to $60 and from $60 per barrel to $65, respectively, APA-Economics reports citing the Agency.
Since S&P’s last price deck revision in March, oil prices have remained on an upward trajectory due to vaccine rollouts and global economic reopenings while global oil supply has remained supportive of prices owing to continued discipline from OPEC-aligned countries and U.S. shale producers, with the latter under pressure from investors to limit capital spending and focus on cash flow and returns
According to the credit rating firm any demand needs will be met by OPEC who will look to maintain, as well as to increase market share.
"With a sustained price recovery, it's unclear if shale producers will continue indefinitely with their disciplined production philosophy, but for now, we don't anticipate any significant ramp up in production in 2021. Additional supply from Iran remains a wildcard and it's difficult at this juncture to determine if economic sanctions will be lifted and how rapidly volumes would ramp up. The resulting impact on prices will be a function of the prevailing demand outlook and response of other OPEC members," S&P said.