News ID: 97270
Publish Date : 01 December 2021 - 21:16

Report: Oil Prices Projected to Hit $125 in 2022

NEW YORK (Oil Price) - Crude oil could soar to $125 per barrel next year and $150 in 2023 due to OPEC’s limited capacity to boost production, JP Morgan analysts said in a new report.
“OPEC+ is not immune to the impacts of underinvestment…. We estimate ‘true’ OPEC spare capacity in 2022 will be about 2 million barrels per day (43%) below consensus estimates of 4.8 million,” the team, led by Christyan Malek, wrote, as quoted by TheStreet.
“While we believe a three-month pause to 400,000 barrel-per-day monthly increments is needed during the first half of 2022 to balance the market (and potentially a cut pending impact of new COVID variants), the group will struggle to deliver monthly growth of more than 250,000 barrels per day once reinstated,” the analysts also said.
According to a CNN report, this rise in the price of crude could push U.S. gasoline prices to over $5.
OPEC and its partners in OPEC+ are meeting later this week to discuss whether to continue adding barrels to total output or pause the additions amid the renewed concern around the pandemic with the emergence of the new Omicron variant and the announced release of crude oil from the strategic reserves of the United States and several of its allies in Asia, plus the UK.
Oil prices dropped steeply after the emergence of the new variant was disclosed, but quickly began to recover.
“We need more time to understand what this new variant is and if we need to overreact or not,” one unnamed OPEC source told Reuters this Sunday. The group is currently producing 3.8 million bpd less oil than before the pandemic.