The last time oil prices were above $100 was in 2014, having stayed above that threshold for more than a year.
Efforts by governments to drive an economic rebound are likely to add strain to tight oil supplies and could send prices to fresh peaks, unless international talks end sanctions on Tehran and lead to a surge in Iranian exports. Oil Price Set To Test Fresh Peaks Barring Iran BreakthroughHigh energy prices are fueling global inflation already at multi-decade highs in Europe and the United States. The last time oil prices were above $100 was in 2014, having stayed above that threshold for more than a year.
International oil prices rose to just short of $100 a barrel on Tuesday as traders weighed a possible disruption of exports from major oil producer Russia after President Vladimir Putin’s decision to recognise the independence of two breakaway regions in Eastern Ukraine, ratcheting up tensions with the West.
Prices remain a long way off the record peak of more than $147 hit in July 2008.
Still, as in 2008, when it took less than five months to soar from roughly current levels to the record, the world is seeing fast economic growth, tight supplies and a lack of spare capacity to provide a cushion against geopolitical shocks.
As the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, gradually unwind output cuts implemented in response to the record demand fall at the height of the COVID-19 pandemic in 2020, JP Morgan predicts that the producer group will continue incremental increases but underperformance by some members will drive prices.
“Supply misses are rising. Market recognition of strained capacity is also growing,” the bank said. “We believe this should drive a higher risk premium … circa $125 a barrel as early as 2Q 2022 and $150 a barrel in 2023.”
A rise in summer travel and falling spare capacity could send prices to $120 a barrel, Bank of America (BofA) Global Research said on Tuesday.