Oil prices will be pushed higher as demand outpaces supply and alternative energy sources such as natural gas and renewables fail to plug the gap, according to JPMorgan Chase & Co, APA-Economics reports citing Bloomberg.
Christyan Malek, the bank’s global head of energy strategy, reiterated his $150-a-barrel price forecast during an interview with Bloomberg TV on Tuesday.
As global crude output lags demand growth, “we’re back to the same issue, which is how do we meet this energy deficit in the future?,” Malek said. “It can’t be coal, it can’t be gas -- we’re maxed out on NG. It’s got to be through solar and wind and then when you’ve gone through that, we still have a major deficit in oil, which basically means that we’re going to see a repricing of oil significantly higher.”
Malek said international oil explorers aren’t spending enough on drilling to replace old reserves, and markets are relying too heavily on OPEC nations to keep the world amply supplied. On the demand side of the equation, Chinese demand probably will see a resurgence once pandemic-related lockdowns are lifted, he noted.
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