Crude oil prices, according to Christyan Malek, the lead for EMEA energy equity research at JPMorgan, might reach $150 per barrel by 2026. Malek thinks that the rising price of crude oil may be caused by an impending energy supercycle. Malek emphasizes that "institutional and policy-led pressures" hastening the transition away from hydrocarbons are another important element.
EMEA Energy Equity Strategist at JPMorgan Signals 'Supercycle'
Brent and WTI crude prices have soared beyond $90 per barrel following the Organization of the Petroleum Exporting Countries' (OPEC) decision to reduce oil output. With the undeniable mark of dedollarization, the confrontation between Ukraine and Russia, and the cooperation on energy among the BRICS nations, 2023 has been an exciting year.
A week ago, Russia's Tass News reported on a huge change: top Russian oil distributor Gazprom Neft has completely stopped utilizing dollars and euros. Christyan Malek, head of EMEA energy equity research at JPMorgan, said that oil might reach $150 per barrel in just three years while speaking with Bloomberg in a recent broadcast.
"Seatbelts, please. A very volatile supercycle is expected, Malek told Bloomberg. The JPMorgan analyst wrote an investor note about the energy supercycle hypothesis as well.
Malek noted that the "long term" outlook "appears well supported by tight [supply and demand] balances and elevated corporate breakevens, while OPEC's falling spare capacity generates additional risk premium of about $20/bbl based on periods in the past that have experienced reduced levels of spare capacity."
Malek predicts a shortage of 1.1 million barrels per day in 2025, which will rise to 7.1 million by 2030. Not just him, though, is raising red flags. A report from the International Energy Agency (IEA) from August also predicts an increase in oil prices.
Additionally, according to August U.S. Bureau of Labor Statistics statistics, there was a 0.6% increase, mostly as a result of rising energy prices. Earlier this year, a Goldman Sachs analyst predicted that Brent would hit $110 a barrel by the middle of 2023. The commodity analysts at Morgan Stanley agreed.
What are your thoughts on the JPMorgan strategist's predictions for oil barrel prices? Post your ideas and viewpoints on this topic in the comments area below.