Crude Gains, World Bank Expects Commodity To Average $44 Per Barrel In 2021.
Crude oil spiked after the latest drop amid supportive US equities yesterday and are back above the key $40 per barrel mark. MCX Crude oil futures closed at Rs 2999 per barrel, up 1.66% on the day after hitting Rs 3026 per barrel. Oil prices fell dramatically in the early stages of COVID-19 and have only partially regained pre-pandemic price levels, according to the semi-annual Commodity Markets Outlook report. When declines in commodity prices are short-lived, policy stimulus can buffer their impact. However, when prices remain depressed for an extended period, policy makers need to find solutions so their economies can adjust smoothly to a new normal.
The World Bank noted that oil prices are expected to average $44 per barrel in 2021, up from an estimated $41 per barrel in 2020. Demand is expected to rise only slowly as tourism and travel continue to be held back by health concerns and as global economic activity is anticipated to return to pre-pandemic levels only in the year after next. Supply restraint is expected to be eased steadily. However, it reassured that energy prices overall —which also include natural gas and coal—are expected to rebound sizably in 2021, following large declines in 2020.