Oil prices could soon break above $100

According to the UAE's Khaleej Times on November 20, oil market analysts said that although OPEC+ production cuts and the EU embargo on crude oil have led to adverse effects on the global economy, oil prices may soon return to above $100 per barrel, much earlier than analysts predicted
two months ago.

The U.
S
.
Energy Information Administration's (EIA) short-term energy outlook for November showed Brent crude spot prices averaging $102.
13 per barrel this year and $95.
33 per barrel next year.

In October, the EIA expects the Brent spot average price to reach $102.
09 per barrel in 2022 and $94.
58 per barrel in 2023, while slightly raising its Brent oil price forecasts
for 2022 and 2023.

Oil prices fell about 2 percent
on Friday on fears of weaker demand and further increases in U.
S.
interest rates.
Brent crude settled at $87.
62 a barrel, down $2.
16, or 2.
4 percent, while U.
S.
West Texas Intermediate settled at $80.
08 a barrel, down $1.
56, or 1.
9 percent
.

But analysts say bullish factors could have the upper hand in the near term, sending oil prices back into triple digits
.

OPEC+'s decision to cut its total production target by 2 million b/d through November has indeed stabilized the oil market, as the group has proclaimed
.
Brent crude oil prices stabilized above
$90.
Commodity analysts said that despite the sharp rate hikes to fight inflation, the risks were more upside than downside
.

Earlier this week, Ole Hansen, head of commodity strategy at Saxo Bank, said in a Gulf Intelligence webinar: "A $10 rise in oil prices is more vulnerable
than a $10 decline.
”

When it comes to a $10 rise in oil prices, risks are still rising
.

Al Arabiya TV reported that OPEC Secretary-General Haitham Al Ghais said the group was prepared to intervene
in the interests of the oil market.

In early October, OPEC+ announced plans to reduce oil production by 2 million barrels
in November 2022 from the required production level in August 2022.
If the plan is implemented, OPEC G10 countries should produce 25.
4 million b/d, while non-OPEC countries should produce 16.
4 million b/d
.
This would actually result in OPEC+ production averaging 41.
9 million b/d
.

The EIA warned that deteriorating global economic conditions could limit the growth of oil demand, "which could lead to oil prices ending up below our forecasts.
"
The group also noted that higher-than-forecast oil prices could be due to supply disruptions
due to the EU's imminent ban on imports of crude oil and petroleum products by sea.

In its latest monthly report, OPEC cut its 2022 oil demand growth forecast by 100,000 b/d to 2.
55 million b/d
.
Oil demand is now expected to reach 99.
6 million b/d in 2022 due to better-than-expected demand in OECD countries, while demand in Q3 2022 and Q1 2022 has been revised
downward due to ongoing geopolitical uncertainty and weakening economic activity in OECD Europe.