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Economists at OCBC Bank see Brent dipping to a low of $45/bbl in Q1 and early Q2, but may rally to $55/bbl by the end of 2021.

Key quotes

“The demand recovery path is not expected to be linear, with the on-off risks of travel restrictions and vaccine manufacturing infrastructure likely to dominate the landscape in early 2021.”

“The start of 2021 will likely prove to be rocky for crude oil, as OPEC+ will presumably raise output each month and Libya continues pumping oil back into international trade.”

“Supply will likely outstrip demand in Q1 till mid-Q2 and Brent may search for a bottom at $45/bbl. From late Q2 on, we expect the wide distribution of a vaccine to lift fundamental demand, resulting in a supply deficit and lifting Brent to $55/bbl by year-end.”