JPMorgan says two factors could drive up oil prices by another $5 to $10 per barrel
JPMorgan says crude prices could see further upside ahead as oil continues to see strong gains so far this year.
It comes against the backdrop of an improving global outlook as major economies press ahead with their ongoing coronavirus vaccination campaigns.
“I think there’s room for oil prices to move a little bit higher in this environment but, you know, not thinking about a price of $80 or $90 a barrel. Maybe it goes up by $5 or $10 more from here,” Kerry Craig, global market strategist at JPMorgan Asset Management, told CNBC’s “Street Signs Asia” on Friday.
Key drivers for higher oil prices
There are two things that will likely drive oil prices going forward, according to Craig.
Firstly, demand for oil is expected to pick up as the global economy recovers from the hit of the coronavirus pandemic, he said. However, that will be “curtailed to a certain extent” due to the low likelihood of international travel coming back in a big way soon. Travel is an “important source of demand,” he added.
On the supply side, he said: “We’re still relying on those OPEC+ members to keep that supply relatively curtailed and I think there’s still a question about that in terms of the amount of supply coming on relative to demand.”
OPEC and its allies, known collectively as OPEC+, have sought to navigate their way through a historically tumultuous period that has included an unparalleled collapse in oil prices as well as a major fuel demand shock amid the pandemic.
Reference: CNBC
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