SINGAPORE – JPMorgan says oil prices could continue to rise upside in advance as oil continues to gain strong gains this year.
This comes amid an improved global outlook, as major economies continue their ongoing coronavirus vaccination campaigns.
“I think there is room for oil prices to move a little higher in this environment, but, you know, without thinking about a price of $ 80 or $ 90 a barrel. It may increase by $ 5 or $ 10 more than here, “Kerry Craig, global market strategist at JPMorgan Asset Management, told Street Signs Asia on CNBC on Friday.
On Friday afternoon, Asian trading hours, international benchmarks for Brent crude futures were at $ 62.91 per barrel. US crude futures traded hands at $ 59.34 a barrel. Both Brent and West Texas Intermediate gross futures increased by up to 20% each by 2021.
Oil prices have moderated in recent days, after rising to their highest level in more than a year.
Just this week, a deadly winter storm in the southern United States led to days of power outages in Texas, destroyed the state’s energy infrastructure and took off millions of barrels a day of oil production. Energy prices have emerged as a result of this evolution.
Key drivers for higher oil prices
There are two things that are likely to drive up oil prices, according to Craig.
First, oil demand is expected to grow as the global economy recovers from the coronavirus pandemic, he said. However, this will be “restricted to some extent” due to the low likelihood of international travel coming to a large extent soon. Travel is an “important source of demand,” he added.
Regarding supply, he said: “We are still relying on those OPEC + members to keep supply relatively low and I think there is still a question about the amount of supply that comes in relation to demand.”
OPEC and its allies, collectively known as OPEC +, have tried to make their way through a tumultuous historical period that has included an unparalleled collapse in oil prices as well as a major fuel demand shock amid the pandemic. .
– CNBC’s Sam Meredith, Jeff Cox and Pippa Stevens contributed to this report.
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