Though global oil supply is beginning to climb, it is rising gradually off of depressed levels and is not expected to exceed the anticipated demand recovery this year. The supply/demand balance should support crude prices near their current levels through 2021, though fluctuations are all but certain, Moody’s Investors Service said in a report this week.

West Texas Intermediate crude prices have hovered near $60/bbl this week. The Moody’s analysts said average prices this year should be in the middle of their forecast range of $45-65/bbl.

“We expect that the recovery in oil production will lag increases in demand and will accelerate a rebalancing of the physical markets,” the analysts said. Prices, however, “will remain highly volatile, with periods outside the top or...