FXStreet notes that oil has staged an impressive recovery, although has been mostly range-bound over the last month, with ICE Brent struggling to break above $70. There are several factors that appear to be holding the market back for the moment, however, strategists at ING expect Brent Oil to hover around $70 through the second half of 2021.

“OPEC+ is set to increase output by 2.1MMbbls/d over the next three months. Iran has been increasing output for much of this year, despite US sanctions, and this is a trend which is likely to continue for the remainder of the year, regardless of whether we see a quick lifting of sanctions or not.” 

“The latest COVID-19 wave across India is a big worry for the oil market, given it is the third-largest oil consumer in the world. Therefore there are concerns that if the situation deteriorates further, we may see a significant hit to global demand.”

“We continue to believe that prices will edge higher as we move through the year, and still expect that ICE Brent will average US$70/bbl over the 2H21. Despite rising OPEC+ output, and also accounting for larger Iranian supply, the market is still set to draw down inventories throughout the year.”