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JPMorgan Analyst Sees Energy Supercycle With Oil As High As $150

JPMorgan’s head of EMEA energy equity research, Christyan Malek, warned markets on Friday that the recent Brent price surge could continue upwards to $150 per barrel by 2026, according to a new research report.

Several catalysts went into the $150 price warning, including capacity shocks, an energy supercycle—and of course, efforts to push the world further away from fossil fuels.

Most recently, crude oil prices have surged on the back of OPEC+ production cuts, mostly led by Saudi Arabia who almost singlehanded took 1 million bpd out of the market, followed by a fuel export ban from Russia. Increased crude demand paired up with the supply restrictions, boosting crude oil prices and contributing to rising consumer prices.

Brent prices were trading around $93.55 on Friday afternoon, but Malek expects Brent prices between $90 and $110 next year, and even higher in 2025.

“Put your seatbelts on. It’s going to be a very volatile supercycle,” Malek told Bloomberg on Friday, as the analyst warned about OPEC’s production cuts and a lack of investment in new oil production.

JPMorgan said in February this year that Oil prices were unlikely to reach $100 per barrel this year unless there was some major geopolitical event that rattled markets, warning that OPEC+ could add in as much as 400,000 bpd to global supplies, with Russia’s oil exports potentially recovering by the middle of this year. At the time, JPMorgan was estimating 770,000 bpd in demand growth from China—less than what the IEA and OPEC were estimating.

JPMorgan now sees the global supply and demand imbalance at 1.1 million bpd in 2025, but growing to a 7.1 million bpd deficit in 2030 as robust demand continues to butt up against limited supply.

By Julianne Geiger for Oilprice.com

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  • Richard Rosati on September 24 2023 said:
    If oil goes to $150.00 Bbl there will be significant damage to the global economy. All of this stems from very poor political leadership, that revolves around an illusory green utopia. The free markets would have shown the way, but, were stymied and forced to accept a flawed political dogma, that like in the past, has never worked. i.e. rent controls, price/wage controls and now electric cars. Ford has a gun to their head to produce and sell EVs that most don't want of can't afford. So far despite federal tax incentives, it's a money losing proposition. The economy is very sick resultant from the 90's Dotcom crash, the 2000's global financial crisis 'Lehman' and the damage was never repaired. Then as a final act that sustained crippling financial consequences, the pandemic struck and created more hardship. The money printing never stopped and similar to Beethoven's 5th symphony, death is knocking at the door.
  • Mamdouh Salameh on September 23 2023 said:
    Some analysts tend to pick up projections from thin air without serious reference to the realities in the market. JPMorgan analyst’s $150 oil projection is one of them.

    Whilst the global oil market is tight with a hint of approaching imbalance and possible shortages, a Brent crude oil price of $150 a barrel has no basis in reality now or for the foreseeable future.

    The only circumstance that we may see $150 oil is if it was proven without doubt that the Saudi voluntary production cut has nothing to do with the market and everything to do with Saudi production difficulties.

    90% of Saudi production has for the last 70 years been coming from five giant fast-depleting and aging oilfields (Ghawar, Safaniya, Hanifa, Khurais and Zuluf) all of which are more than 70 years old and are being kept producing by an injection of billions of barrels of water. That is why a reduced Saudi production could become a permanent feature of the market.

    By 2030 I project that Saudi Arabia could be left with an estimated 120,000-400,000 barrels a day (b/d) to export at which time it would have virtually ceased to remain an exporter.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

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