SINGAPORE – JPMorgan says crude oil prices could advance even further as oil continues to experience strong gains so far this year.
It is in the context of an improving global outlook as major economies move forward with their ongoing coronavirus vaccination campaigns.
“I think there’s room for oil prices to go up a little bit more in this environment, but, you know, we’re not thinking about a price of $ 80 or $ 90 a barrel. Maybe go up $ 5 or $ 10 more from here “Kerry Craig told CNBC Strategic Market on Friday, CNM’s global market strategist told JPMorgan Asset Management.
On Friday afternoon, during trading hours in Asia, international benchmark Brent crude futures stood at $ 62.91 per barrel. U.S. crude futures traded hands at $ 59.34 a barrel. Both Brent and West Texas crude oil futures have risen more than 20% each by 2021.
Oil prices have moderated in recent days after peaking in more than a year.
Just this week, a deadly winter storm in the southern United States caused days of power outages in Texas, shattering the state’s energy infrastructure and eliminating oil production of millions of barrels per day. Energy prices emerged as a result of this development.
Key drivers for rising oil prices
There are two things that will likely push oil prices up, according to Craig.
First, demand for oil is expected to increase as the world economy recovers from the success of the coronavirus pandemic, he said. However, this will be “reduced to some extent” due to the low likelihood that international travel will return soon to a large extent. Travel is a “major source of demand,” he added.
As for supply, he said: “We continue to rely on these OPEC + members to keep this supply relatively small and I think there is still a question as to the amount of supply relative to demand.”
OPEC and its allies, collectively known as OPEC +, have attempted to navigate a historically tumultuous period that has included an unparalleled collapse in oil prices, as well as a major shock to fuel demand amid the pandemic.
– CNBC’s Sam Meredith, Jeff Cox and Pippa Stevens contributed to this report.
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