High oil prices to linger say BoA, Chevron

Crude oilThe Bank of America has stated that the price of the international crude oil benchmark, Brent, could hit $100 over the next six months if the winter in western countries is colder than usual.

Brent traded at $75.71 per barrel as of 08:52pm Nigerian time on Thursday, higher by 0.33 per cent, while the United States West TEXAS Intermediate traded at $72.64 per barrel as it gained 0.03 per cent.

Oilprice.com quoted an earlier report in June by BoA analysts as saying, “We believe that the robust global oil demand recovery will outpace supply growth over the next 18 months, further draining inventories and setting the stage for higher oil prices.”

The bank, in its latest report, still saw upside for oil prices amidst modest market deficits in the next few months.

The analysts said in their September report, “Downside risks include a new COVID-19 wave, taper tantrum, a China debt crisis, and the return of Iranian crude barrels. Having said all of that, winter weather risk is quickly becoming the most important driver of energy markets.

Meanwhile, the Chief Executive Officer of Chevron Corporation, Mike Wirth, stated in an interview with Bloomberg that global oil and gas prices would remain higher for longer as companies resisted ramping up production.

He was quoted as saying that investors had become nervous about the long term future of their oil and gas investments and were prioritising cash returns now, rather than later.

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