Oil rally to continue in 2022 as demand outgrows supply
Oil prices that rallied 50 percent in 2021 will power further ahead this year, some analysts predict, saying a lack of production capacity and limited investment in the sector could lift crude to $90 or even above $100 a barrel.
Analysts say oil prices will be supported by the reluctance of many governments to restore the strict restrictions that hammered the global economy when the pandemic took hold in 2020.
With the prospect of depleting crude inventories and low spare capacity by the second half of 2022, and limited investments in the oil and gas sector, the market will have little margin of safety, Morgan Stanley said. The bank added that it also expects oil prices to “overshoot” to $125 a barrel this year, and $150 in 2023.
Some experts say that while oil could “momentarily” reach above $90 this year, downward pressure on prices would come from production increases in Canada, Norway, Brazil and Guyana.
