Factors Affecting the Price of Crude Oil in 2021 Crude Oil Price 80 70 60 50 40 30 20 10 (USD/bbl) Source: Platts & Reuters 2 Jan. 19 2 Mar. 19 2 May 19 2 Jul. 19 2 Sep. 19 2 Nov. 19 2 Jan. 20 2 Mar. 20 2 May 20 2 Sep. 20 2 Sep. 20 2 Nov. 20 2 Jan. 21 2 Mar. 21 2 May 21 2 Jul. 21 2 Sep. 21 2 Nov. 21 Jan’ 21 Saudi Aramco will add more cut 1 mmbd in Feb21-Mar21 support recovery. Jul’ 21 OPEC Plus agreed to add 0.4 mmbd in every month from Aug21-Dec21 to balance market. Nov’ 21 Oil price collaps due to Biden and allies will release SPR to cool down the price. On late of Nov’ 21, new variant Omicron cause new pressure on global oil demand recovery. Mar’ 20 OPEC’s price war, OPEC and allies not agreed on production cut then they increased production volume to fight for market share. Dec’ 20 Vaccine rollout. U.S. approved for emergency use of Pfizer & BioNtech and Moderna vaccine. Apr’ 20 Covid-19 pandamic slump global oil demand mainly on jet and diesel due to social distancing policy stop internation flight and lower business activites. May’ 20 OPEC and allies have agreed on production cut 9.7 mmbd in May-Jun and 7.7 mmbd in 2H20. Apr’ 21 OPEC Plus will add more production to balance market in May-Jul21. Market Overview and Industry Outlook Crude Oil and Petroleum Products in 2021 In 2021, crude oil prices teetered under demand pressure from COVID-19, but rebounded and trending higher overall, averaging USD 69.2 per barrel. A USD 27 upswing compared to 2020 can be attributed to a marked improvement in situation as COVID-19 vaccines reached the general population in much of the world. Global oil demand rose by four to five million barrels per day but remained lower than pre-COVID-19 levels. Oil prices began to climb at the beginning of the year after Saudi Arabia announced production cuts by 1 million barrels per day in February and March to curb market surpluses. Crude prices jumped by USD 10 a barrel by February. In the second quarter, US crude oil stocks began to decline, reflecting a market deficit. As a result, OPEC Plus decided at its July meeting to raise crude outputs by 0.4 million barrels per month from August through December. This was aimed to achieve a relative supply-demand balance and price stabilization as excessively high prices could trigger shale oil production. Meanwhile, OPEC Plus monthly meeting to determine the group’s production volumes, kept the markets guessing. The US crude production increased slightly by about 0.7 million barrels per day, compared to the beginning of the year. In late 2021, the US rig count rose to 470 from 400. Due to tight market, crude inventories continued to decline to the pre-COVID-19 levels by early fourth quarter as oil prices exceeded USD 85 per barrel in October. This prompted the US and allies to announce they would release oil from their strategic reserves to put a damper on oil prices. Towards the end of the year, the highly contagious Omicron coronavirus variant started spreading, causing crude prices to drop by USD 10 per barrel due to fears that the new COVID-19 strain would put pressure on oil demand again. Crude Oil Price Forecast for 2022 Dubai crude oil spot price will likely move in the USD 67-75 per barrel range even though the oil market remains tight at the beginning of the year. OPEC Plus is expected Dubai Dated Brent 82 IRPC PUBLIC COMPANY LIMITED 56-1 ONE REPORT 2021
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