SINGAPORE – JPMorgan says crude prices would see more upside as oil continues to see strong gains so far this year.
It is against the backdrop of a growing global outlook as major economies move forward with their ongoing coronavirus vaccination campaigns.
“I think there’s room for oil prices to move a little higher in this environment but, you know, not to think about the $ 80 or $ 90 per barrel price. It might go up by $ 5 or $ 10 more from here, “Kerry Craig, JPMorgan Asset Management ‘s global market strategy, told CNBC’ s” Street Signs Asia “on Friday.
On Friday afternoon Asian trading hours, Brent international futures were at $ 62.91 per barrel. U.S. crude futures changed hands at $ 59.34 per barrel. Both Brent and West Texas Intermediate crude futures have gone up more than 20% each so far in 2021.
Oil prices have been at a level in the last few days after peaking in more than a year.
Just this week, a deadly winter storm in the southern U.S. led to days of power outages in Texas, wreaking havoc on the state’s energy infrastructure and taking millions of barrels per day of oil production offline. That development led to energy prices.
Key drivers for higher oil prices
There are two things that are likely to drive oil prices forward, according to Craig.
First, demand for oil is expected to pick up as the global economy recovers from the outbreak of the coronavirus pandemic, he said. However, this will be “cut in part” due to the low speed of international travel in the near future. Travel is an “important source of demand,” he said.
On the supply side, he said: “We still have a responsibility to these OPEC + members to keep that provision relatively reduced and I think that there is still a question about that in terms of that. the amount of supply matches the demand. “
OPEC and its allies, collectively known as OPEC +, have tried to make their way through a historically turbulent period that has led to an unprecedented fall in oil prices as well as a major upheaval in fuel demand among its customers. pandemic.
– CNBC’s Sam Meredith, Jeff Cox and Pippa Stevens contributed to this report.
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