The price of oil begins to accelerate: what is the reason

The benchmark price for Brent crude will reach $120 a barrel by the end of June 2022, Bank of America said in a research note.

The catalyst for the upgrade in BofA's price outlook is the current global energy crisis, which has sent crude oil, coal, natural gas and LNG prices skyrocketing as the market recovers from the pandemic.



Just a month ago, the US predicted that oil could rise to $100 over the next six months, and only if the coming winter turned out to be colder than usual. It was severe frosts that were considered the most important driver of global energy markets.

Now, Bank of America experts believe that the recovery in global oil demand will continue to outpace supply over the next year and a half, which will lead to a reduction in inventories and create the basis for further energy price increases.

In September, BofA pointed to a gloomy environment in European energy markets, where depletion of gas supplies has led to sharp price volatility.

The US now believes that rising prices for diesel, jet fuel and gasoline, along with a shortage of refining capacity, will accelerate price increases next year.

OPEC+ production volumes will be agreed on Thursday this week, although many expect the group to stick to its plan to increase the limit by 400 barrels per day. However, the problem lies in the fact that physically the exporting countries have not been able to increase production.

Other traders and banks believe that oil will soon come close to $100, as energy demand has already reached 100 million barrels per day, which is a pre-Covid figure.