Crude oil could hit $100 and top it, and this could happen before this year's end, according to Craig Johnson from investment bank Piper Sandler.
Speaking to CNBC, Johnson said, "I could actually see a number that could be north of 100 in the next, say, six to ... 12 months from here," noting the still strong upside potential of crude. "To us, it looks like you could have more than 40% upside to get back to the old highs in 2018".
Johnson joins other financial professionals in their upbeat predictions for crude oil prices, largely driven by the $1.9-trillion economic stimulus package that Congress approved last week. That is widely expected to jumpstart the U.S. economy, boosting oil demand.
Global demand recovery is also a factor in these bullish oil price forecasts even if this recovery has been uneven, strongest in Asia and most notably China but slow to return to pre-pandemic levels in other key markets.
Then there is the supply side. OPEC+ has decided to keep its 7.2-million-bpd production cuts, which recently drove Brent over $70 a barrel, albeit briefly. If the cartel continues to limit production, the global oil market will swing into a deficit of some 3.5-3.6 percent of demand, according to Princeton Energy Advisors. And this deficit has the genuine potential to drive oil price closer to $100.
Yet nothing is certain, even with improving demand. China's oil storage space is filled to capacity, according to reports. In India, another major driver of global demand, fuel prices have gone so high they are dampening demand. And the country is already looking for alternative suppliers to the Middle Eastern members of OPEC because current prices are too high for it.
Not all forecasters are so bullish, however. A recent Reuters poll revealed a consensus price projection of $59.07 a barrel for Brent crude. Individual forecasts vary from $50-70 over the next five years, according to Bank of America, to $67 a barrel this year, according to Barclays, and $75 by the third quarter, according to Goldman Sachs.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More