- Oil prices could briefly climb to $ 100 a barrel in 2022 as demand increases, according to Bank of America.
- On the demand front, pent-up desires to move after an 18-month lockdown will push prices up.
- Brent crude has not hit $ 100 since 2014. On Tuesday, it topped $ 75 a barrel for the first time in two years.
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Oil prices could briefly climb to $ 100 a barrel in 2022 as demand increases, according to Bank of America.
The firm’s Francisco Blanch said three demand factors and three supply factors would push Brent to a “Benjamin” level. Brent crude has not hit $ 100 since 2014.
On the demand front, people’s pent-up desire to relocate after an 18-month lockdown will drive up prices, along with continued use of private cars, as commuters are slow to return to public transportation. He also said that more remote work could result in more kilometers driven, “because working from home turns into working from the car.”
On the supply side, Blanch expects political pressure from the government in the United States and around the world to limit capital spending in the coming quarters in order to meet the targets set out in the Paris Agreement. and limit CO2 emissions. In addition, investors were more vocal on ESG, which could dampen the offer.
“In short, demand is about to rebound and supply may not follow completely, putting OPEC in control of the oil market in 2022,” Blanch said.
As a result, BofA increased its Brent crude oil price forecast for 2021 from $ 63 per barrel to $ 68 per barrel and raised its 2022 crude oil projections to $ 75 per barrel from $ 60 per barrel.
“Yet the elasticity of non-OPEC oil supply has not completely disappeared. US shale will likely react to these higher prices, suggesting that Brent will fall back on average to $ 65 / bbl by 2023,” he added.
On Tuesday, Brent crude exceeded $ 75 a barrel for the first time in two years. It now sits at $ 74.90.