The year 2020 brought many surprises to world stock markets. The pandemic, the US election, Trump's departure, the creation of the vaccine and the late start of vaccination left their mark on the oil market.

All of this has resulted in crude oil prices falling. On January 11, OPEC was $54.76 per barrel, compared to $55.66 for Brent and $52.25 for WTI. Despite many countries recording the highest COVID-19 infection rates in December, hopes of imminent vaccination resulted in Brent and OPEC reaching a price above $50 per barrel in late 2020.

In 2020 the established oil supply and demand patterns were changed due to the unpredictable onset of the Covid-19 pandemic.

Given that most countries started to conduct vaccination against the virus, the world’s economic activity is expected to increase once again, although it will take time for the business dynamic to go back to the pre-Covid levels.

Oil Expectations

According to the US EIA report (STEO), the Brent oil average of $43/b in the Q4 of 2020 is expected to go up to $49/b in 2021. With a rising oil demand on a global level and restrained OPEC+ oil production, inventories will go down but still remain on a high level.
Brent prices will average $47/b in the Q1 of 2021 and up to an average of $50/b by Q4. These prices reflect sharper oil inventory moves as a result of OPEC+ decision to limit its production growth in January of 2021.

OPEC crude oil production will average 27.5 million barrels per day in 2021, which reflects OPEC's announced potential increases to production targets in Libya.
In Q1 of 2021, oil production will average 25.7 million b/d, which is 1.7 million b/d lower than in the previous forecast made in November before announced changes of OPEC+ targets.

As you can see from the infographic the forecasted oil Q1 total world supply will be 94.46 million b/d and the world consumption 96.26 million b/d. As 2021 approaches an end these two values will come closer and the total stock draw will shrink.