Several investment banks raised their crude oil price forecasts for the year, indicating a delayed respite from high prices.

Bank of America analyst Paul Ciana pointed out in a note that West Texas Intermediate (WTI) oil has been trending up lately, suggesting prices could rise. WTI oil rose to $130 a barrel in March, after which it cooled. However, prices are now rising, indicating that oil now has momentum behind it, he said.

“Price has corrected and completed an upward continuation trend pointing toward $140 a barrel this summer,” Ciana wrote, according to Business Insider.

Historically, prices have tended to rise when WTI breaks above $115 a barrel, the analyst said, while noting that prices have been trading above that level since early June. WTI crude is up 61.50% year-to-date, to June 9.

Barclays raised its Brent price forecast by $11 a barrel in 2022 and $23 in 2023, citing a larger and longer-lasting disruption to Russian oil supply following EU sanctions. Oil production in Russia is expected to fall by 1.5 million barrels per day by the end of this year. Brent crude is expected to average $111 a barrel in 2022, with WTI averaging $108.

The bank said in a note that oil inventories are expected to remain tight over the horizon period, due to limited spare capacity and limited US supply growth. The only thing that could affect it would be a “significant slowdown” in demand, the bank said, according to Reuters.

Financial services firm UBS also expects near-term oil prices to remain elevated, with factors such as Northern Hemisphere summer demand and China’s economic reopening serving as support.

“The negative impulse from global growth remains insufficient to rebalance stocks at current prices,” Goldman analysts said, according to Bloomberg. “Oil prices need to rise further to normalize unsustainable levels of global oil inventories.”

Goldman calculates that oil needs to average $135 a barrel over the 12 months from July for global oil inventories to normalize by the end of 2023.

Saudi Arabia recently raised prices for its July crude oil. State-backed Aramco, the world’s largest oil exporter, raised the price of its flagship Arabian light crude by $2.10 a barrel from June prices at a premium of $6.50 per barrel for its Asian customers.

Prices for customers in North West Europe and the Mediterranean have also been increased. Pricing for Aramco’s US customers remained unchanged.

Meanwhile, the Organization of the Petroleum Exporting Countries and its allies have decided to increase their oil production by 648,000 barrels per day in July and August, against 432,000 barrels per day initially planned.


Naveen Athrappully is a reporter and covers world affairs and events at The Epoch Times.