Oil prices that rallied 50% in 2021 will power further ahead this year, analysts predict, saying a lack of production capacity and limited investment in the sector could lift crude above $100 a barrel.
Though the Omicron coronavirus variant has pushed COVID-19 cases far above peaks hit last year, analysts say oil prices will be supported by the reluctance of many governments to restore the strict restrictions that hammered the global economy when the pandemic took hold in 2020.Register now for FREE unlimited access to Reuters.
The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, are gradually relaxing the output cuts implemented when demand collapsed in 2020. However, many smaller producers can't raise supply and others have been wary of pumping too much oil in case of renewed COVID-19 setbacks."We don’t want to see $100 a barrel. The world is not ready for that," Omani Oil Minister Mohammed Al Rumhi was quoted as saying by Bloomberg on Tuesday.
Standard Chartered, meanwhile, has raised its 2022 Brent forecast by $8 to $75 a barrel and its 2023 Brent forecast by $17 to $77.J.P. Morgan analysts also expects oil prices to rise as high as $90 by the end of the year. Current demand strength is acvting as a near-term tailwind, having proved largely immune to surging coronavirus infections, the bank said.Reporting by Bozorgmehr Sharafedin Editing by David GoodmanSubscribe for our daily curated newsletter to receive the latest exclusive Reuters coverage delivered to your inbox.
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