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Oil prices may show a slow recovery this year amid the gradual lifting of restrictions due to the pandemic, but a second wave of COVID-19 could slow the pace of recovery.

Brent crude will average $ 41.50 a barrel in 2020, according to a survey of 43 analysts and economists, slightly above the consensus forecast last month of $ 40.41 and below the average of around $ 42 YTD.

The price is expected to average $ 49.85 in 2021. The forecast for 2020 for WTI rose to $ 37.51 a barrel from $ 36.10 in June.

Oil is in the process of a step-by-step rebalancing with everything “moving in the right direction” in terms of supply, said Garry Chilingirian, head of commodity research at BNP Paribas.

The uncertainty lies in recovery in demand, and COVID-19 developments are raising fears that the pace of restarting (economies) could slow down.  Analysts expect a decrease in global demand this year by 7.2-8.5 million barrels per day, compared with the previous forecast of 6.5-8.7 million barrels per day.

However, a vaccine against the virus could speed up the economic recovery and in turn, drive up oil prices, analysts say.

“A breakout of the $ 40-45 range is possible if the global economic recovery is faster and stronger than expected,” said LBBW analyst Frank Schallenberger.

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