The rebound in oil prices since the lows of April is expected to slow and future gains will depend on a variety of factors including the strength of oil demand and a global economic recovery as the world still wrestles with the Covid-19 pandemic, according to Moody’s Investors Service.

Moody’s expects constrained oil supply to continue underpinning the commodity, with near-term oil prices forecast to average $40-45/bbl, before slowly reaching the firm’s medium-term price assumptions of $45-65/bbl. 

The initial rebound in oil prices has flattened since July, reflecting what Moody’s analysts said is a “slowdown in the recovery of demand, as well as oil production returning after shut-ins in March and April.” A dramatic rebound in oil prices from April, when Brent crude...