The new year could see the global oil market swing from its current state of oversupply to some of the highest monthly supply deficits in years as the rollout of Covid-19 vaccines propels a recovery in demand, according to experts.

crude balance

Raymond James & Associates Inc. analysts said Monday they expect “hefty” crude oil inventory draws in both 2021 and 2022, “which, by definition, is bullish for prices.”

The analyst team led by John Freeman and Pavel Polchanov said they expect West Texas Intermediate (WTI) crude to close 2021 at $65/bbl, “Which implies an average of $57 for the year (20% above the futures strip), followed by an average of $65 in 2022 (40% above the strip), with Brent at a modest premium.”

They cautioned, however, that a return to pre-pandemic global oil...