Could oil prices break $100 next year?
“It’s a futures market, we always discount stuff that’s going to happen in the future, now. That’s why prices are rallying right now,” the analyst said on the Bloomberg Surveillance program.
“We’ve always called for $80 plus oil in 2022. Maybe that is $100 now given how much liquidity there is in the system. I wouldn’t rule that out,” Sen noted.
On Monday, Brent Crude prices hit $60 a barrel, rising above that threshold for the first time since the start of the Covid-19 pandemic early last year.Also on rt.com Oil touches 13-month high driven by global recovery hopes & OPEC+ supply cuts
In terms of prompt fundamentals, Energy Aspects’ Sen thinks, like some other analysts, that the market has gotten ahead of itself, “because right now demand is still relatively weak.”
However, the second half of the year does look much, much healthier in terms of demand, the analyst added.
Like other analysts and Torbjörn Törnqvist, chief executive at one of the world’s largest independent oil traders, Gunvor, Sen also sees headwinds to price gains at oil above $60, as US production is set to begin rising.
According to Energy Aspects, US oil output will not go back to pre-Covid levels any time soon, if ever, because producers are more focused on shareholder returns right now.
Last week, Törnqvist told Bloomberg that oil prices were unlikely to soar much above the $60 per barrel mark, considering that this price level would incentivize a lot of oil supply, including from the United States.Also on rt.com China continues to be main driver for oil demand in 2021
“We are at price levels which will look increasingly attractive to producers, so we would expect to see some producer flows coming into the market, which should provide some resistance to prices,” ING strategists Warren Patterson and Wenyu Yao said on Tuesday.
“Looking at the WTI forward curve, while the curve is in backwardation, prices all the way through to the end of 2022 are above US$50/bbl,” they said.