By Chris Bishop
Oil will recover to $43-a-barrel by the end of the year.
That was the word from commodity analyst Giovanni Staunovo at an online briefing by UBS that painted a slightly encouraging picture of the world economy.
The briefing heard that there had been an uptick in investment and retail interest in gold, despite under pressure central banks slowing purchases of bullion – which was a cushion for the world economy last year. Joni Teves a precious metals Strategist for UBS, said she believed the gold market would be well supported in 2021.
Oil was also likely to shake off its low price blues this year despite a drop in demand of 20%,largely because of COVID-19, in a market where supply has not fallen.
“In the short term there is downward pressure if we keep oil prices subdued,” says Staunovo.
“We will see 43 dollars a barrel at the end of the year. We will see mobility restrictions being removed and oil demand will be high, but it will still take time to recover by December. There will be a demand recovery in the third quarter and we will see more people flying than before and production is falling very quickly among OPEC and its allies.”