The US bank, JPMorgan, expected oil prices to rise despite the variables from record, and the bank has estimated that Brent prices could reach $ 150 a barrel in 2023, as OPEC + controls supply and defends oil prices.
According to the new assessment, this means that the Biden administration’s launch on strategic oil reserves will have minimal impact on the base price of oil, according to the initial reaction. The price of oil last week After the government flooded the market with 50 million barrels.
According to Business Insider, the main driver behind oil prices is supply and demand, although the Omicron variable COVID-19 affected oil prices on Friday.
Investors fear that potential blockages in the country will reduce travel and, consequently, the demand for oil. JPMorgan viewed the current price action as an overreaction.
“We believe the market has overestimated the impact of the recent appearance of the Omicron variable on oil prices during the US holiday period, inferring that there will be no slowdown in holiday flights even with the prevalence of the Omicron variant,” he said. the bank in a note Monday.
With oil demand likely to remain flat, supply will remain the main driver of oil prices for years to come. With OPEC + “in the driver’s seat of oil prices,” JPMorgan believes the price of Brent crude oil will reach $ 120 a barrel in 2022 and could exceed the price of $ 150 a barrel in 2023, which represents potential. up to 100% increase from current levels.
Increased supplies from US oil producers could help put pressure on oil prices, but the number of US oil rigs is about half what it was in 2019 and investment in the sector has been slow since the oil prices briefly turned negative at the start of the outbreak in 2020.
According to the report, “This is a recipe for higher oil prices, at least until US oil production reaches the levels last seen before the pandemic.”
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