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Bank Of America Analyst says that Oil Could Hit $100

According to Bank of America, Brent crude oil could top $100 a barrel next year as the world emerges from the COVID-19 pandemic. Global demand will outpace supply in 2022 as effective COVID-19 vaccines and OPEC+ supply curbs keep supply and demand out of whack.

Francisco Blanch, strategist at Bank of America wrote that there is plenty of pent-up oil demand ready to be unleashed. Pent-up demand following 18 months of lockdowns, a continued preference of private car usage over mass transit and remote work potentially leading to more miles driven will keep demand strong.

Bank Of America Analyst says that Oil Could Hit $100Supplies will be limited by government pressure to curb capex Paris climate agreement goals, assuage demands for environmental, social, and governance investing and pressure to lower carbon emissions. Blanch said that in short, demand is poised to bounce back and supply may not fully keep up, placing OPEC in control of the oil market in 2022.Bank of America strategist sees Brent crude oil, the international standard, averaging $68 a barrel this year and $75 next year. Brent has climbed 37% this year to $74.90 on Monday as OPEC and its allies have slowly begun pumping out more crude to meet rising demand fueled by the easing of COVID restrictions.

Prices had been held back by the possibility that Iran would be allowed to return to the market, but the recent election of hardliner Ebrahim Raisi as Iranian president reduces that possibility. As for West Texas Intermediate crude oil, the U.S. benchmark, Blanch said prices could reach $95 a barrel by next September. WTI closed at $73.66 a barrel on Monday

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