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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Why Bank Of America Thinks Oil Prices Are Heading To $100

Oil prices could hit $100 per barrel over the next six months if we have a colder-than-usual winter, which could be the most important driver of global energy markets in the coming months, Bank of America says. 

Oil Prices Could Climb Above $100

If winter temperatures in the northern hemisphere turn out to be below seasonal norms, oil demand would spike and could lead to oil shooting up to the $100 mark, Bank of America Global Research said in a recent note carried by Reuters.

BofA Global Research said in June that expectations of a strong demand recovery that outpaces supply in the coming months could lead to oil prices briefly hitting $100 per barrel in 2022

“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 June, in which they significantly raised their price forecasts for next year’s average Brent Crude prices. 

Nearly three months later, BofA still sees the upside for oil prices amid modest market deficits in the next few months. It also sees potential for oil to hit $100 a barrel earlier than its mid-2022 call in June if the winter is colder than normal. 

In the latest note, Bank of America analysts wrote: 

“Downside risks include a new COVID-19 wave, taper tantrum, a China debt crisis, and the return of Iranian crude barrels. Having said all of that, winter weather risk is quickly becoming the most important driver of energy markets.” 

The current record-high energy prices in Europe could be a sign of the things to come in commodity markets, Goldman Sachs says.  

“European energy pricing dynamics offer a glimpse of what is in store for other commodity markets, with widening deficits and depleting inventories leading to elevated price volatility,” the investment bank’s analysts wrote in a new report carried by Bloomberg

By Tsvetana Paraskova for Oilprice.com

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Leave a comment
  • George Doolittle on September 13 2021 said:
    Wouldn't be the first time.
    Long $slv Silver ETF
    Strong buy
  • Mamdouh Salameh on September 13 2021 said:
    Nothing new in these forecasts. Despite a surge of the Delta variant around the globe, the fundamentals of the global oil market are robust enough not only to overwhelm the pandemic but also support higher oil prices.

    That is why Brent crude price is expected to touch $80 a barrel before the end of the year and average $71-$72 in 2021 with global oil demand reaching 99-100 million barrels a day (mbd) and returning to pre-pandemic level.

    It is also possible that Brent crude could hit $100 in the first half of 2022 if robust global oil demand outpaces supply growth causing a deficit in the market or if the world faces an extremely harsh winter.

    A return of Iranian crude barrels to the market isn’t going to materialize any time soon since a lifting of US sanctions against Iran will never see the light of the day soon or ever because the positions of the United States and Iran are irreconcilable. And even if Iranian crude did return to the market, the maximum that Iran could bring to the market wouldn’t exceed 650,000 barrels a day (b/d).

    As for a China debt crisis, this is highly improbable because the Chinese economy is the strongest economy on earth. Moreover, China has been amassing huge volumes of gold in support of both the yuan and the petro-yuan.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Borran Wilderton on September 14 2021 said:
    Middle East & Asian producers investing in infrastructure and technology and hiring all the talent from western nations, paying large tax free salaries. Wasn’t it a year ago oil was supposed to never go higher than $25. ? Oil is the fuel of the future.
  • Bill Simpson on September 19 2021 said:
    With the greens, more and more ignorant governments, and private investors, all trying to reduce oil and gas use anyway they can, in about 6 years it might hit $250 a barrel. Russia and the Gulf States will collect trillions of dollars selling oil and gas to an energy starved world.
    Read about the UK energy prices to see what is coming to your neighborhood before 2026.
    Oil and gas are cheap compared to batteries and hydrogen.
    Better pray an energy shortage doesn't collapse the entire financial system which is loaded with over $500 trillion of debt.

Leave a comment




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