Oil at $100 Per Barrel Possible by 2022 – RBC Capital Markets
Crude oil price at $100 per barrel possible by 2022, says RBC Capital on Wednesday amidst increased demand for crude across the globe. Oil prices are set to continue their uptrend over the next 12 to 18 months due to strong demand with prices potentially reaching $100 a barrel by next year, RBC Capital Markets said in a note to clients.
The oil market is in the early stages of what the bank’s analysts call a strong cycle, though how long that will last is dependent on demand. In general, crude prices have been on the ascendancy as the global economy heals.
“Normalizing inventories, tapering OPEC spare capacity and an upcoming call on US shale, round out our long held three-step blueprint for sustainably higher oil prices,” RBC analysts said.
“The common theme in this roadmap centres on removing both storage and supply buffers, leading to a structurally tight fundamentally driven cycle.
“While $100 oil should not yet be a base case investment thesis, plausible pathways are within the realm of possibilities for next year.”
The Organisation of Petroleum Exporting Countries and allies (OPEC+) deadlock has cast a shadow on the oil market, but the analysts expect the issue to be temporary as market fundamentals will be the main driver in the short term.
Market participants have said any dips are “buying opportunities,” the report said.
Gasoline prices in the US are 5% higher than at any point during the Trump administration, reaching $3.13 a gallon, which gives a boost to WTI compared with Brent, as US local fundamentals are improving better than the rest of the world.
Stocks at Cushing storage are below the seasonal average, with storage utilization of 52%, according to the research note.
Oil at $100 Per Barrel Possible by 2022 – RBC Capital Markets
