$100 oil is now inevitable
$100 Oil Is No Longer An Outrageous Prediction A triple-digit oil price is no longer an outrageous prediction as it would have been in early 2020. Francisco Blanch, global head of commodities and derivatives research at Bank of America, expects oil to hit $100 by September 2022, or even earlier if this winter is much colder than expected. Demand is coming back, while we have seen severe underinvestment in supply the last 18 months, Blanch told Bloomberg at the end of September. The underinvestment problem cannot be solved easily, and at the same time we have surging demand, he said. We are moving into a straightjacket for energy, we dont want to use coal, we want to use less and less gas, we want to move away from oil, Blanch told Bloomberg. While oil is unlikely to sit at triple digits for a sustained period of time, underinvestment has become a multi-year problem for the industry, Blanch noted. Even if oil doesnt stay at $100 a barrel, a supply crunch down the road would nevertheless move the floor under oil prices higher and lead to unsustainable price spikes. As much as climate activists want a stop to investment in new supply, the industry and the world cannot afford it because oil demand continues to grow. By Tsvetana Paraskova for Oilprice.com