Expectations that strong demand recovery would outpace supply in coming months could lead to oil prices briefly hitting $100 per barrel in 2022, BofA Global Research said in a note on Sunday, as carried by Reuters.
“We believe that the robust global oil demand recovery will outpace supply growth over the next 18 months, further draining inventories and setting the stage for higher oil prices,” analysts at BofA wrote in the note, in which they significantly raised their price forecasts for average Brent Crude prices next year.
According to the bank, Brent Crude will now average $68 a barrel in 2021, compared to an earlier estimate of $63 per barrel. BofA sees the Brent price averaging as much as $75 a barrel in 2022, up from a previous forecast of $60 per barrel.
BofA Global Research expects the global oil market to continue to be undersupplied in the next year and a half, seeing an average supply deficit of 900,000 barrels per day (bpd) over the next six quarters, the bank’s analysts said.
With these new outlooks on the oil market, BofA becomes the latest forecaster to not rule out the possibility of $100 oil in the near future.
David Tawil, president of Maglan Capital, told Fox Business last week that “incredible demand,” inflation, and shareholder pressure on oil supermajors to drastically cut emissions could lead to an oil crisis within three years, with very high oil and gasoline prices. Oil prices are set to rise “consistently and considerably now into the end of the year,” Tawil said.
The world’s largest independent commodity traders are also bullish, not ruling out $100 oil.
Although oil may not be headed to a new supercycle, prices still have room to rise from current levels because of a strong demand rebound and expected tightness in supply, top executives at Trafigura, Vitol, and Glencore said at the FT Commodities Global Summit last week.
By Tsvetana Paraskova for Oilprice.com
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We’ve been warning about this for years now.
This is what you get when you attempt to engineer the demise of a commodity that is essential to every aspect of human existence.
Make no mistake, what we have seen since 2015 is a carefully planned take down of the oil industry for political reasons, except that it had the opposite effect from that desired, and now look, the industry is booming again more than ever and the future of oil looks brighter than it ever has.
The first factor is a new supercycle. There are indications that oil could be headed to a new supercycle. Since early December crude oil prices have staged an impressive comeback. Brent crude oil price has shot up from $40 a barrel in early December to $74.14 a barrel today, a 7-month non-stop surge.
The second factor is a major supply deficit triggered by significantly reduced investments in developing new resources pushing Brent beyond $100 in the third quarter of 2022 or the first quarter of 2023.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
Only last year the futures price of oil was *MINUS* 40 US Dollars a barrel. One look at the performance of ahem "Icahn Energy Partners" ahem shows an awesome amount of financial fraud being ahem "papered over" ahem by some type of so called cough, cough "guaranteed way to generate inflation" cough cough which is only not noted by physical traders because of the enormity of the fraud.
Once this fraud in oil trading is realized *YET AGAIN* the fallout will of course be material and massive given the amount of debt in the USA that simply put will never be repaid once this a plain old fashioned recession in the USA starts to sink its teeth into what was anyways and in some ways today still is a "great growth narrative."
The US Treasury Market ain't buying it ... or i should say *IS* buying a big time massive recession in the USA at the moment.
Certainly a speculation far larger by orders of magnitude than happened in 1929. "All because a *BELIEF* that debts and deficits can simply be inflated away."
At some time *IN THE FUTURE* this may come to pass but not at the moment.
Obviously the USA is hardly Venezuela, Zaire, Zimbabwe, Argentina...cough cough "the euro zone" cough cough, Putin's Russia etc etc etc.
Even Canada looks like a disaster at the moment.
Long $IBM International Business Machines
Strong buy