Global oil demand could fall by 9-10 million barrels per day (bpd) this year due to impact of the COVID-19 pandemic, Russian Energy Minister Alexander Novak said on Friday, adding prices had room to recover further.
That’s in line with last month’s forecast by the Organization of the Petroleum Exporting Countries, which saw world oil demand tumbling by 9.06 million bpd this year.
Demand for oil has been hit by the pandemic, which has forced lockdowns across the globe and led to a steep decline in consumption of the fuel.
Speaking at an online conference, Novak also said oil prices could potentially rise to around $65 per barrel next year, but that he expected them to be volatile.
Brent crude is currently trading around $44 per barrel, after slumping to a 21-year low below $16 in April at the height of restrictions to contain the pandemic.
Asked by the conference moderator if he agreed with Goldman Sachs’s forecast that the oil price could reach $65 per barrel, Novak said it was possible, but that he was more cautious.
“I have a rather more modest forecast, comparing to Goldman Sachs, for 2021. In my opinion, again, speaking about the average price per year, we could be in a corridor of $50 to $55 per barrel. But the volatility might be there,” he said via an interpreter.
Goldman Sachs expects Brent to rally to $65 per barrel by the third quarter of 2021 and average $59.40 for the year.
