(Reuters) – Oil prices are expected to overshoot $125 a barrel next year and $150 in 2023 due to capacity-led shortfalls in OPEC+ production, JP Morgan Global Equity Research said.
“As the group’s (OPEC+) real volume potential is discovered, this should drive a higher risk premium to oil prices,” the bank said in a note dated Nov. 29.
Oil rose on Thursday, with benchmark Brent crude futures around $69 a barrel, as investors adjusted positions ahead of an OPEC+ decision on supply policy, although concern the Omicron coronavirus variant could hit fuel demand capped price gains.
The Organization of the Petroleum Exporting Countries and its allies will decide whether to release more oil into the market or restrain supply.
“We think OPEC+ will slow committed increases in early 2022, and believe the group is unlikely to increase supply unless oil prices are well underpinned,” the bank said.
The bank forecast global oil demand to reach 99.8-101.5 million barrels per day in 2022-23.