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Higher production from OPEC+ member states and in the Americas means that global oil production is set to rise sharply over the next eighteen months. This is the reason why strategists at Capital Economics expect oil prices to fall from Q4 this year and throughout 2022.

It will take until at least mid-2022 before output returns to its pre-virus level

“We expect global oil production to expand to around 96m bpd in 2021, from just under 94m bpd in 2020, and to fully rebound to pre-virus levels by 2022. This should be enough to swing the global oil market balance into a surplus, which would boost stocks and weigh on oil prices.”

“We forecast that the price of Brent (WTI) will peak in Q3 later this year at $75 ($72) per barrel before falling gradually to $60 ($57) by end-2022.”