Global crude oil prices are expected to be range bound and between $40-50 a barrel in 2021 as major oil producers have decided on a modest output rise from January that earlier anticipated, analysts have said on the emerging oil pricing scenario.

The news of a successful coronavirus has ignited the oil market again with crude price moving up mire than 20 per cent in a month to hover close to $50 a barrel now.

However, analysts believe oil prices may not see any big rise even in 2021 as demand conditions continue to remain below the peak levels.

The OPEC + decision now not to go for any big time increase in oil production in first two quarters of 2021, any major price fall of crude has been averted and crude may be range bound even in 2021.

According to a report by ICICI Securities, supply deficit of crude would be in the range of 0.5m b/d in Q1CY21E and 0.2-2.8m b/d in Q2-Q4CY21E as OPEC+ has decided to raise output by just 0.5m b/d in January 2021 and by not more than 0.5m b/d in later months and only after deliberations.

This would prevent oversupply of oil and keep oil prices from a big crash as witnessed early this year. OPEC was to prune output cuts from 7.7m b/d to 5.8m b/d from January, 2021.