Oil prices are set to average $50 per barrel for 2021, rising by 20 percent from the average last year, but still well below the average for 2019, the International Monetary Fund (IMF) said in its World Economic Outlook Update on Tuesday.
In the October update, the IMF had expected oil prices—which it calculates at the simple average of the prices of Brent, Dubai Fateh, and West Texas Intermediate crude—to average $46.70 a barrel in 2021.
The average price of oil was $41.29 per barrel in 2020, while the IMF sees the average 2021 price at $50.03 and at $48.82 a barrel for 2022.
In the January economic update published today, the IMF sees the vaccine rollout strengthening economies in the latter half of this year.
The fund expects the global economy to grow by 5.5 percent in 2021 and by 4.2 percent in 2022, amid exceptional uncertainty.
“The 2021 forecast is revised up 0.3 percentage point relative to the previous forecast, reflecting expectations of a vaccine-powered strengthening of activity later in the year and additional policy support in a few large economies,” the IMF said in its report on Tuesday.
Last year, the global economy shrank by an estimated 3.5 percent, 0.9 percentage point higher than projected in the October forecast.
The U.S. economy is set to rise by 5.1 percent this year, following a contraction of 3.4 percent last year.
Saudi Arabia, the world’s top oil exporter, is expected to see its economy rising by 2.6 percent in 2021, recovering from a 3.9-percent slump in 2020, which was largely due to the low oil prices last year.
This year, the average price of oil will rise from the 2020 average to reflect the expected global recovery, while non-oil commodity prices are also expected to increase. Prices of metals, in particular, are forecast to accelerate strongly in 2021, according to the IMF.