London, (Business News Report) – Oil prices are expected to reach $125 this year, and $150 next year, 2023, said multinational investment bank J.P. Morgan.
OPEC’s spare capacity is below market expectations and impedes its ability to respond to high oil prices, according to J.P. Morgan.
The bank added that it sees “a growing recognition in the market of weak global investment in supply.”
J.P. Morgan
Oil prices hit their highest levels in two months on Wednesday, supported by a supply shortage. This comes at a time when crude inventories in the United States, the world’s largest consumer, falling to their lowest levels since 2018.
Assuming production at current quotas, J.P. Morgan said in a note, the surplus production capacity of OPEC will fall to four percent of the total production capacity by the fourth quarter of 2022. This is compared to 13 percent in the third quarter in 2021.
Oil prices
In a related context, international oil prices continued to rise to maintain their largest daily rise since the beginning of 2022, at a time when investors turned to high-risk assets and industrial estimates that indicated an additional withdrawal from US oil stocks.
West Texas Intermediate crude, the benchmark for US oil, was trading at more than $81 a barrel, after rising 3.8% yesterday.
Bloomberg News Agency quoted informed sources as saying that the American Petroleum Institute, which represents the interests of American oil companies, monitored a decline in American oil stocks by one million barrels during the past week.
International oil prices have been rising since the beginning of this year, in light of the decline in concerns about the repercussions of the spread of the new mutated Coronavirus, known as Omicron.
At the same time, US stocks are declining. This indicates a lack of supply in the markets and supply disruptions from many member countries of the OPEC+.
The price of West Texas Intermediate crude rose, on Thursday, by 0.2% to reach $81.41% a barrel for February delivery.
The global benchmark Brent crude price rose 0.1% to $83.82 per barrel for delivery next March.
