Brent and WTI prices are expected to reach $53 per barrel (/b) and $50/b respectively in 2021, said Barclays, a British multinational investment bank and financial services company in its latest Commodities Research report.

“We recommend a call backspread trade with $35/b and $45/b Brent July 2021 options,” Barclays added in the report.

Oil prices have bounced back sharply from their lows in the early second quarter (Q2) of the year but recently have been consolidating in the $40-45/b range for the Brent, just shy of the ‘tight range’ conducive for higher US tight oil activity, the report said.

The rally is supported by a faster-than-expected rebalancing of supply and demand, aided by a partial recovery in demand and voluntary and involuntary supply adjustments, bolstered by a weaker trade-weighted USD.

“However, we are not there yet in terms of fundamentals for the next leg higher, in our view, and could potentially see some correction over the near term if demand recovery slows further, especially in the US,” the report said. – TradeArabia News Service