According to forecasts, oil has every chance of gaining strong upside momentum in the coming year. Apparently, oil prices are on course for a record-breaking run. Experts predict explosive growth in crude prices.
Despite huge losses incurred in November and a sell-off that has sliced almost 20% off oil prices, the new year could become successful for the asset. Notably, as of November 30, Brent crude futures for February traded at $69.6 per barrel, while WTI crude for January delivery settled at $66.18 per barrel. Thus, Brent crude oil lost 17% over the month, and WTI tumbled by 20%. The situation in the global oil market has been far from perfect for the past year and a half. Oil has suffered record losses, hitting new lows. For instance, in March 2020, the quotes collapsed by more than 50%. In November, oil tanked again amid concerns over the new Omicron variant of the coronavirus. However, things may change dramatically as early as next year. JPMorgan analysts are very optimistic about the prospects for the oil market. They predict that the asset could soar to $125 per barrel in 2022 and $150 per barrel in 2023. The main growth drivers could become a recovery in global output and OPEC's limited capacity to boost production. "OPEC+ is not immune to the impacts of underinvestment," the team of experts led by Christyan Malek stated.
"We estimate 'true' OPEC spare capacity in 2022 will be about 2 million barrels per day (43%) below consensus estimates of 4.8 million," the statement said.
