London — Oil prices will average just above $50/b in 2021, a more than 21% rise from 2020's depressed level, as the rollout of vaccines and fiscal stimulus programs will help the global economy post a stronger-than-expected recovery from the pandemic, the International Monetary Fund said in an updated forecast.
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The IMF now expects global GDP to grow 5.5% in 2021, after a 3.5% contraction in 2020. The 2020 figure has been revised up 0.9 percentage point from the previous forecast issued in October, while the 2021 estimate is a 0.3 percentage point upward revision.
The IMF said advanced economies are projected to recover more quickly than developing countries due to quicker access to vaccines and broader fiscal measures.
"Oil exporters and tourism-based economies face particularly difficult prospects given the subdued outlook for oil prices and expected slow normalization of cross-border travel," it said.
The IMF uses a simple average of prices of Brent, Dubai and WTI to calculate its oil prices. With that methodology, the IMF said oil prices averaged $41.29/b in 2020 and would rise to $50.03/b in 2021, before falling back to $48.82/b in 2022.
The October forecast had estimated that oil prices would average $46.70/b in 2021.
"Non-oil commodity prices are also expected to increase with those of metals, in particular, projected to accelerate strongly in 2021," the IMF said.
The fund said its forecasts were subject to significant uncertainty, with the pandemic yet to be contained.