Bank of America expects oil to touch $100/bbl in 2022: report

Onshore drilling rigs

Oil prices may surge to $100 a barrel (bbl) next year as travel demand rebounds, Bloomberg reported, citing Bank of America.

Global oil consumption will continue to outstrip supply in 2022 as the economic recovery from the pandemic boosts fuel consumption, while investment in new production may be hindered by environmental concerns, the bank said in a report.

“There is plenty of pent-up oil demand ready to be unleashed,” said Francisco Blanch, the bank’s Head of Commodities Research.

Oil consumption will be bolstered next year, with even the ongoing popularity of remote working unable to dent fuel consumption as much as expected.

“Work-from-home means ‘work-from-car’ in many cases,” Blanch said.

At the same time, the bank expects that new oil supplies will remain constrained. Shareholders will pressure major companies to invest in renewable energy, or push shale drillers to return cash rather than spend on new drilling.