Biggest banks on Wall Street expect oil at $100 per barrel

Two of the biggest banks on Wall Street are calling a new ‘supercycle’ in oil, with JPMorgan Chase and Goldman Sachs both predicting prices will soar when the pandemic abates, Report informs, referring to the Financial Times.

The most bullish forecast has international crude prices staging a comeback towards the $100-a-barrel region - a level not reached since 2014.

The expected surge is predicated on the belief that fiscal stimulus will boost consumption just as investment in new production has been sucked out of the industry. Such a disconnect between demand and supply, fueling an ongoing surge in prices, are the basic conditions of a so-called supercycle.

It would transform conditions in the oil sector, which was hammered last year by the COVID hit to demand and doom-laden predictions about what the widespread embrace of electric vehicles will mean for the market.

"We’re going to be short of oil before we don’t need it in the years to come," JPMorgan’s head of oil and gas, Christyan Malek, told clients on a conference call last week. ‘We could see oil overshoot towards, or even above, $100 a barrel.’

The price of a barrel of April futures for Brent oil on Feb. 18 was $65.09 (+1.17 percent). A barrel of March futures for WTI crude was at $61.72 (+0.95 percent).