Bloomberg reported that three Big Oil CEOs have joined Analysts and traders in forecasting Brent crude to reach $100 per barrel. Oil prices could continue to rise, according to Exxon’s Darren Woods, TotalEnergies’ Patrick Pouyanne, and Shell’s Ben van Beurden, due to constrained supply caused by fewer production investments. However, they cautioned that market instability might put downward pressure on pricing.
Exxon’s Woods said at the Qatar Economic Forum, “Lack of sufficient investments was “going to exacerbate supply and demand tightness as the economies pick back up again, and then in time we’ll see supply pick up and rebalance.” Brent might reach $100 by next year, according to Bank of America, as demand outstrips supply amid a stronger-than-expected rebound. Trafigura, a commodity trading company, has forecast that oil will return to three-digit territory in the next 12 months, and Goldman Sachs experts have said that such a development is not ruled out.
In the fourth quarter of this year, global oil consumption is predicted to approach pre-pandemic levels, surpassing 2019 demand in 2022 and setting a new annual global oil demand record. The global economic recovery, paired with the reduction or elimination of COVID-related limitations, particularly travel restrictions, is expected to boost demand for fuels and petrochemicals.
The bank’s Analysts wrote, ““We believe that the robust global oil demand recovery will outpace supply growth over the next 18 months, further draining inventories and setting the stage for higher oil prices.” Meanwhile, with 5.8 million bpd of idled production potential, OPEC+ is ready to act. According to reports this week, the cartel expects to add more barrels to supplies in August after returning a little more than 2 million bpd between May and July.