Amid all the problems triggered by the Texas turmoil, and as oil prices reach post-COVID highs, analysts across the energy space appear to be outperforming themselves with their optimistic forecasts.
Source: Bloomberg
Brent Crude prices could reach $ 70 a barrel in the second quarter of 2021, while they are set to average $ 60 this year, Bank of America said this week, raising its average price forecast by $ 10 the barrel in relation to the previous projection.
Echoing Bank of America, Morgan Stanley also sees Brent hitting the $ 70 mark this year, but a little later – in the third quarter, expecting “a much better market”, including on the demand side.
On Sunday, Goldman Sachs initiated investment bank updates on oil price forecasts, expecting Brent Crude prices to reach $ 75 a barrel in the third quarter of this year, due to a faster rebalancing of the market, expected stocks lower prices and traders protecting themselves against inflation.
But all of these forecasts pale in comparison with Socar Trading SA of Azerbaijan predicts that the Brent global benchmark could reach three digits in the next 18 to 24 months, and Bank of America sees potential peaks above $ 100 in the coming years in improvement fundamentals and global stimulus.
Related video: Goldman calls $ 70 oil in the second quarter, but jet fuel is the wildcard
And even with the WTI curve deep in the recession …
Source: Bloomberg
Bloomberg reports, speculators are also taking action, increasing bets on the options market that oil will reach the level promised by December 2022.
As the graph below shows, the number of open contracts on these $ 100 strike calls in December 2022 has exploded since the turmoil in the Texas energy markets.
Source: Bloomberg
However, as Bloomberg notes, these $ 100 forecasts are far from the current consensus. The median of analyst forecasts compiled by Bloomberg shows Brent below $ 65 a barrel by 2025. And there are many reasons to doubt such a resurgence. On the one hand, the OPEC cuts that limited supply are artificial, and the cartel has enough idle capacity to meet any deficit if demand skyrockets after a worldwide recovery from the pandemic, according to Bloomberg Intelligence.
By Zerohedge.com
More top readings from Oilprice.com: