Monday 27 May 2024
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KUALA LUMPUR (Dec 1): Brent crude prices will reach US$125 per barrel next year and US$150 in 2023, as OPEC+ producers won’t be able to crank up production.

New York-headquartered financial news and financial literacy website TheStreet on Monday (Nov 29) quoted J.P. Morgan analysts led by Christyan Malek as saying OPEC+ is not immune to the impacts of underinvestmen.

“We estimate 'true’ OPEC spare capacity in 2022 will be about 2 million barrels per day (43%) below consensus estimates of 4.8 million.

“While we believe a three-month pause to 400,000 barrel-per-day monthly increments is needed during the first half of 2022 to balance the market (and potentially a cut pending impact of new COVID variants), the group will struggle to deliver monthly growth of more than 250,000 barrels per day once reinstated,” they said.

The J.P. Morgan analysts said their bottom-up field-by-field model reveals a total capacity shortfall extending to 3 million barrels per day versus an OPEC+ target of 49.1 million barrels in the first half of 2024.

“This underperformance comes at a critical juncture, as other global producers falter,” they said.

 

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