Analyst: Oil prices may rise to $100 in 2022 as supply growth struggles to meet demand

Some analysts predict that oil prices, which rebounded 50% in 2021, will gain further strength
in 2022.
Insufficient capacity and limited investment in the industry could lift crude prices to $90 or even more than
$100 a barrel, they said.

While the Omicron variant has pushed coronavirus cases far above last year's peak, analysts say the reluctance of many governments to return to tight pandemic restrictions will support oil prices
.
The restrictions imposed during the pandemic in 2020 hit the global economy
hard.

Brent crude futures hit a two-month high of $85.
21 per barrel on Wednesday (Jan.
12), and fell slightly on Thursday (Jan.
13), currently trading near
$84.
45 per barrel.

Jeffrey Halley, senior market analyst at OANDA, said, "Assuming that the Chinese economy does not slow down sharply, the impact of Omicron will fade, and OPEC+ production increase capacity is significantly limited, I see no reason why Brent crude oil should not rise towards $100 in the first quarter, and possibly sooner
.
" ”

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, the so-called OPEC+, are gradually easing the production
cuts implemented when demand collapsed in 2020.

However, many smaller producers have been unable to increase supply, and others have been vigilant in case they produce too much oil
as the pandemic rebounds.

Morgan Stanley predicts that Brent crude will reach $
90 per barrel in the third quarter of 2022.

The bank said the market's margin of safety will be small
in the second half of 2022 with the depletion of crude inventories and low spare capacity, as well as limited investment in the oil and gas industry.

Oil prices are expected to rise by as much as $
30 after the U.
S.
Energy Information Administration (EIA) and Bloomberg cut OPEC's capacity forecasts for 2022 by 800,000 b/d and 1.
2 million b/d, respectively, analysts at JPMorgan Chase reported on Wednesday.

However, the bank added that oil prices are expected to "overrun" to $125 per barrel in 2022 and reach $
150 in 2023.

Claudio Galimberti, senior vice president at Rystad Energy, said oil prices could be expected to rise to $
100 if OPEC members adhere to production discipline and want to keep the market tight.

But he doesn't think it's a possible scenario
.
While oil prices may reach above $90 "temporarily" in 2022, increased production in Canada, Norway, Brazil and Guyana will put downward pressure
on prices.

Oman's oil minister, Mohammed Al Rumhi, also said on Tuesday that OPEC did not want to see $100 in oil
.
"The world is not ready to accept such a price," Bloomberg News quoted him as saying
.

Standard Chartered raised its 2022 Brent oil price forecast by $8 to $75 per barrel and raised its 2023 Brent oil price forecast by $17 to $
77 per barrel.

A survey of 35 economists and analysts at the end of December 2021 showed that Brent crude oil is expected to average $73.
57 per barrel in 2022, about 2%
lower than the $75.
33 estimated at the time of the November survey.
The forecast value is the average price for the whole year, not the peak
.