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‘Extremely bullish’: Oil could hit US$100 per barrel this summer

China's recovery, and surging energy demand, continue to surpass expectations, says the IEA

Energy Aspects sees global oil demand growing by 1.5 million barrels of oil equivalent per day in 2023, led by China’s reopening. (GETTY)
Energy Aspects sees global oil demand growing by 1.5 million barrels of oil equivalent per day in 2023, led by China’s reopening. (GETTY) (Olga Rolenko via Getty Images)

Oil could climb above $US100 per barrel by late summer before rallying to more than $US115 in 2024, according to Amrita Sen, chief oil analyst at Energy Aspects.

Sen outlined an “extremely bullish view for oil” in a virtual presentation hosted by Wells Fargo last week, according to Michael Blum, managing director of Wells Fargo Securities.

Sen sees global oil demand growing by 1.5 million barrels of oil equivalent per day in 2023, led by China’s reopening. On the supply side, she notes the recent OPEC+ production cuts aimed at supporting the market have yet to take effect.

On Tuesday, the International Energy Agency flagged “all-time record” demand from China in March, as the country’s recovery “continues to surpass expectations.” In its closely watched monthly oil market report, the agency predicted global demand will climb by 2.2 million barrels of oil equivalent per day this year, with supply conditions tightening in the back half of 2023.

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U.S. benchmark West Texas Intermediate Crude (CL=F) prices were virtually flat at $US$72.48 per barrel at 8:39 a.m. ET on Thursday as traders monitor the ongoing U.S. debt ceiling negotiations. International Brent oil futures (BZ=F) fell less than one per cent to US$76.56 per barrel.

Energy Aspects expects WTI oil prices to average US$107 per barrel in the second half of this year, US$117/Bbl in 2024, and US$141/Bbl in 2025. The projections account for a “mild” recession in OECD nations.

In China, Energy Aspects sees a full economic recovery adding a further 500,000 to 600,000 barrels of oil equivalent per day to global demand. Right now, Sen says international travel from China remains 40 per cent below pre-COVID levels, while property market weakness limits fuel demand from construction.

Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.

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