Oil prices rose on Tuesday following a forecast from Credit Suisse that the global economy is likely to recover in 2021. The Swiss bank said that the global economy is expected to grow by 5.2% next year, which could lead to increased demand for oil. This, in turn, could lead to higher oil prices.
The price of Brent crude, the international benchmark, rose by 1.3% to $48.94 a barrel, while U.S. West Texas Intermediate (WTI) crude rose by 1.4% to $45.80 a barrel. This was the highest level for both benchmarks since early October.
The Credit Suisse forecast was based on the expectation that the global economy will continue to recover from the coronavirus pandemic in 2021. The bank said that the recovery will be driven by increased investment, consumer spending, and government stimulus measures. It also noted that the recovery could be hampered by a resurgence of the virus and ongoing trade tensions between the U.S. and China.
The rise in oil prices is also being driven by OPEC+ production cuts and a weaker U.S. dollar. OPEC+ is an alliance of oil-producing countries led by Saudi Arabia and Russia that have agreed to reduce production in order to support prices. The U.S. dollar has been weakening in recent weeks, which makes oil cheaper for buyers using other currencies.
The rise in oil prices is good news for oil producers, but it could be bad news for consumers. Higher oil prices could lead to higher fuel prices, which could put a strain on household budgets. It could also lead to higher inflation, which could erode the purchasing power of consumers.
Overall, oil prices rose on Tuesday following a forecast from Credit Suisse that the global economy is likely to recover in 2021. The rise in prices is being driven by OPEC+ production cuts and a weaker U.S. dollar, as well as increased expectations of increased demand for oil due to the economic recovery. While this is good news for oil producers, it could lead to higher fuel prices and inflation, which could put a strain on consumers’ budgets.
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