This year, oil may show a stellar rally. Experts foresee explosive growth in crude prices. Some optimists expect $125 per barrel. Notably, just several months ago, there was not even a sign of such a dramatic rise.
In November, crude prices tumbled by almost 20%. As a result, on November 30, Brent futures for February delivery cost $66.18. In general, during the last year and a half, the global oil market was showing poor performance. Crude was depreciating at the record pace, touching one low after another. Thus, in March of 2020, oil prices nosedived by more than 50%. In November, they collapsed again amid the new Omicron strain.
However, this year, the situation has changed considerably. Analysts at JPMorgan were among the first optimists who expected a jump to $125 per barrel in 2022. They suppose that in a year, crude prices may hit $150 per barrel. The global production recovery and OPEC’s output cut could become the main drivers of oil prices. Christian Malek, the head of EMEA oil and gas equity research at J.P. Morgan, said that OPEC+ might face a lack of investments.
JPM estimates “true OPEC spare capacity next year to be around 2 million barrels per day (BPD) below consensus estimates of 4.8 million bpd.”
