SINGAPORE – JPMorgan said oil prices could grow even further ahead, as oil continues to record strong gains so far this year.
It comes in a scenario of improvement in the global panorama, as the main economies move forward with their vaccination campaigns against coronavirus.
“I think there is room for oil prices to go up a little bit more in this environment, but, you know, without thinking about a price of $ 80 or $ 90 a barrel. Maybe it will go up by $ 5 or $ 10 more from here, “Kerry Craig, global market strategist at JPMorgan Asset Management, told CNBC” Street Signs Asia “on Friday.
On the afternoon of trading in Asia on Friday, Brent’s international benchmark oil futures stood at $ 62.91 a barrel. American oil futures changed hands at $ 59.34 a barrel. Brent and West Texas Intermediate crude futures have risen more than 20% each so far in 2021.
Oil prices have moderated in recent days, after reaching their highest levels in more than a year.
This week, a deadly winter storm in the southern United States resulted in power outages in Texas, destroying the state’s energy infrastructure and taking millions of barrels a day from oil production. Energy prices have skyrocketed as a result of this development.
Main drivers for higher oil prices
There are two things that are likely to boost oil prices in the future, according to Craig.
First, demand for oil is expected to increase as the global economy recovers from the impact of the coronavirus pandemic, he said. However, this will be “reduced to some extent” due to the low likelihood that international travel will return on a large scale soon. Travel is an “important source of demand,” he added.
On the supply side, he said: “We still have OPEC + members to keep supply relatively low and I think there is still a doubt about that in terms of the amount of supply in relation to demand.”
OPEC and its allies, collectively known as OPEC +, sought to navigate a historically tumultuous period that included an unparalleled collapse in oil prices, as well as a major fuel demand shock amid the pandemic.
– Sam Meredith, Jeff Cox and Pippa Stevens of CNBC contributed to this report.
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