A gradual recovery in oil demand is largely on track as economies reopen, British bank Barclays said on Friday, adding that it remained constructive on oil prices despite rising coronavirus cases in Asia and the potential return of Iranian supplies.

He lowered demand estimates for the emerging markets region of Asia (excluding China), signaling the risk of a further decline if the recent spike in infections persists.

“Extensive mobility restrictions in the region could slow the recovery in demand somewhat, but it seems unlikely that it will block it for an extended period, given the largely positive results of immunization programs around the world,” he said. said Barclays.

The bank expects Brent and WTI prices to average $ 66 per barrel and $ 62 per barrel, respectively, this year. He sees an increase from $ 5 to $ 6 a barrel in 2021.

Brent futures were trading around $ 65.23 per barrel, while US West Texas Intermediate was at $ 62.17 per barrel during Asian trading hours on Friday.

In its memo titled “Cautious Supply, Healing Demand,” Barclays said a swift deal to revive and implement the Iran nuclear deal could pose a downside risk to its pricing outlook for the second half of the year. 2021.

“But such a scenario could also lead to a slower reduction in supply restrictions by OPEC +, potentially mitigating the blow to prices,” he added.

If the United States lifted sanctions on Iran, the Middle Eastern nation could increase oil shipments, adding to the global supply.

Global oil inventories could largely normalize over the next two to three months, given a recent drop in inventories and a projected deficit of around 1.5 million barrels per day in the second half of the year, said the bank. A cautious approach by US producers of quality oil and maintaining the OPEC + restriction helps normalize inventories, he added.