In private, Western officials worry Brent crude will reach $150 a barrel soon from about $120 now. Some fear it keeps going higher, with wild chatter about oil hitting $175 or even $180 by the end of 2022, driven by post-Covid pent-up demand and European sanctions against Russia.
And the shock won’t end this year.
Amid widespread fears of an oil price spike this summer, another storm is developing over the horizon: The oil shock won’t end in 2022.
It’s almost certain to roll into next year.
The International Energy Agency will publish its first look at the 2023 supply and demand oil balance on Wednesday – marking the start of the annual pivot when investors increasingly focus their attention on the following year.
Already, money has been flowing into the December 2023 Brent contract, lifting its price close to $100 — clear sign traders see the tight market lasting.
The higher-for-longer oil price outlook will add to global inflationary pressures and erode the margins of manufacturing companies. ♦
