Oil experts from national oil and gas conglomerate PTT Group estimate global oil prices will range between US$45-55 per barrel next year as the global economy is recovering.
Thursday’s prices stood at $49.
A $1 change in crude oil prices will alter Thai retail oil prices by 0.15-0.2 baht per litre if taxes stay constant, energy officials said.
PTT’s latest oil price outlook is based on oil demand next year, which is expected to rise by 5.3 million barrels per day (MBD) while the global oil supply will increase by 1.8MBD.
Strategic planning expert Kanin Bodipat of PTT Exploration and Production Plc said the estimate assumes control of Covid-19, a global economic recovery and cooperation among major oil exporters to cap oil production. Under this scenario, oil demand would exceed supply by 3.5MBD.
However, global oil prices will drop if factors such as more outbreaks of Covid-19 and poor cooperation among oil exporters erupt next year.
Under this unpleasant prospect, 2021 oil prices will range between $35-45 per barrel because demand will be lower than supply by 4.4MBD.
“Major oil exporters will also be fighting to increase their market share during the economic recovery next year after suffering low price levels this year,” said Mr Kanin.
The global economy is expected to grow by 5.2% after a 4.4% contraction this year, thanks to stimulus packages worth $10 trillion worldwide, said Meta Weeraorankul, an expert at PTT’s derivatives trading department.
He said the International Air Transport Association estimated the aviation industry across the globe also suffered $77-billion damage and the industry will resume its growth in 2024.
“This estimate also depends on the production and distribution of Covid-19 vaccines. Their logistics is likely to be complicated,” said Mr Meta.
Amonthep Chawla, head of research at CIMB Thai Bank, said the Thai government should be aware of four factors that can deal a further blow to the economy: a reshuffle of economic ministers, foreign exchange fluctuations, trade war among giant economies and new Covid-19 outbreaks.
He also suggested the government make use of Asean free trade agreements to encourage foreign investors to relocate their bases to Thailand.