Crude Oil Prices under OPEC+ Control: A Review of the Crude Oil Market in 2021

Arab News Network reported on January 4 that in 2021, due to the increase in international crude oil demand and insufficient supply, the price of oil rose by about
50%.
Since the fourth quarter of 2020, oil prices have continued to rise
.
OPEC+'s announcement to extend its production cuts until April 2021 also contributed to the surge
in oil prices.

In January, Brent crude was around $52 a barrel, and by the end of the first quarter, it had risen to $
70.
Oil supplies have become tight
against the backdrop of a global economic recovery, tight inventories and insufficient production capacity.
The U.
S.
called for OPEC+ to open up gas supplies and boost production, but OPEC+ continued to limit supplies and the call was shelved
.
Since last August, global natural gas prices and even coal prices have risen sharply, forcing many power generation companies to switch from natural gas to oil and diesel, which in turn has contributed to the rise in crude oil prices
.
At the United Nations Climate Change Conference in Glasgow, the price of Brent crude hit $86 a barrel, a seven-year high
.

Although OPEC+ insisted that it would abide by its commitment to gradually increase production in July last year, the increase still failed to meet market demand, directly contributing to the surge
in oil prices in October.
In response, in November, the United States announced the release of 50 million barrels, the largest emergency oil reserve in U.
S.
history, from the country's Strategic Petroleum Reserve, but crude oil prices rose 2%.

This shows that in 2021, OPEC+ completely controlled global crude oil prices
.
At the end of last year, despite market expectations affected by the Omicron virus, Brent crude oil was still trading at close to $
80 per barrel.
In a December report, JPMorgan predicted that looking ahead to 2022, oil prices will reach $125 per barrel due to OPEC+ production constraints and $150 in 2023
.

Goldman Sachs conservatively predicts that oil prices will be high this year and 2023, possibly rising between $100 and $110 per barrel
.
The International Energy Agency forecasts crude oil consumption to reach 99.
53 million barrels per day in 2022, up from 96.
2 million barrels
per day in 2021.