Global demand will outpace supply in 2022 as effective COVID-19 vaccines and OPEC+ supply curbs keep supply and demand out of whack.
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"There is plenty of pent-up oil demand ready to be unleashed," wrote Francisco Blanch, strategist at Bank of America.
Pent-up demand following 18 months of lockdowns, a continued preference of private car usage over mass transit and remote work potentially leading to more miles driven will keep demand strong.
At the same time, supplies will be limited by government pressure to curb capex Paris climate agreement goals, assuage demands for environmental, social, and governance investing and pressure to lower carbon emissions.
"In short, demand is poised to bounce back and supply may not fully keep up, placing OPEC in control of the oil market in 2022," Blanch wrote.
He sees Brent crude oil, the international standard, averaging $68 a barrel this year and $75 next year.
Brent has climbed 37% this year to $74.90 on Monday as OPEC and its allies have slowly begun pumping out more crude to meet rising demand fueled by the easing of COVID restrictions. Prices had been held back by the possibility that Iran would be allowed to return to the market, but the recent election of hardliner Ebrahim Raisi as Iranian president reduces that possibility.
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As for West Texas Intermediate crude oil, the U.S. benchmark, Blanch said prices could reach $95 a barrel by next September. WTI closed at $73.66 a barrel on Monday.
Blanch sees oil prices retreating in 2023 as U.S. shale is "likely to respond to these higher prices."
Bank of America isn’t the first firm to call for $100 oil.
Executives from a handful of firms, including Glencore and Goldman Sachs, last week told the FT Commodities Global Summit that $100 oil was a real possibility.
Oil has not traded at $100 per barrel since 2014, when booming U.S. shale production helped global output swamp demand.