Three big things happened in November 2020 that will impact the global and U.S. oil market in 2021:
- Positive news about a vaccine,
- Joe Biden winning the U.S. presidential election, and
- the return of Libyan production.
These events point to higher oil demand in 2021 and more oil supply, including from Iran. On the flip side, the vaccine news is promising and in line with our base case assumptions. The IHS Markit global base case assumptions are higher world oil demand and prices in 2021, with a relatively bleak demand view over the next two to three months. Soaring new cases of COVID-19 in Europe and North America point to the possibility of demand weakness and downside risk in the short run, despite year-on-year oil demand growth in mainland China.
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