Barclays Commodities Research on Monday raised its oil price forecasts for 2020, citing limited potential downside to its demand outlook.
The bank raised its 2020 Brent and U.S. West Texas Intermediate (WTI) price forecasts by $2 to $43 per barrel and $39, respectively.
For 2021, the bank expects Brent and WTI prices to average $53 and $50 per barrel, respectively.
“We remain constructive on oil prices for next year as we see limited potential downside to our demand outlook, primarily due to the evolving response function of governments as well as the general public towards the virus threat and continued OPEC+ restraint,” Barclays said.
Last week, OPEC and its allies said the group would take action on members that are not complying with deep output cuts to support the market following a coronavirus-led slump in fuel demand.
The Organization of the Petroleum Exporting Countries (OPEC) and other producers, such as Russia, are cutting output to the tune of 7.7 million barrels a day to support oil prices.
Brent was trading at $42.97 per barrel and WTI at $40.94 a barrel.
Oil prices edged higher on Monday as a tropical storm took aim for the U.S. Gulf of Mexico region halting some production, though price gains were capped by the potential return of oil output in Libya and a continued rise in coronavirus cases.