JPMorgan expresses concern over potential energy supercycle leading to oil prices surging to $150.

 

Christyan Malek, who heads JPMorgan’s EMEA energy stock research, issued a warning to investors on Friday, suggesting that the recent increase in Brent crude oil prices would persist and potentially reach $150 per barrel by 2026, as outlined in a recent research report.

Several factors contributed to the cautionary $150 price projection, including capacity disruptions, the possibility of an energy supercycle, and global efforts to transition away from fossil fuels.

Production cuts by OPEC+, primarily led by Saudi Arabia, which resulted in a reduction of nearly 1 million barrels per day (bpd) from the market, coupled with Russia’s embargo on fuel exports, caused a surge in crude oil prices. Alongside supply limitations, heightened demand for crude oil pushed prices higher, subsequently impacting consumer costs.

As of Friday afternoon, Brent crude prices were hovering around $93.55. Malek anticipates that these prices could range from $90 to $110 next year and potentially increase further by 2025.

Malek cautioned, “Prepare for a highly volatile supercycle,” as he raised concerns about OPEC’s production cuts and the insufficient investment in new oil production.

JPMorgan also warned that OPEC+ might introduce an additional 400,000 bpd to global supplies, and Russia’s oil exports could rebound by mid-year.

The financial institution also predicted that oil prices were unlikely to reach $100 per barrel in the current year unless a significant geopolitical event rattled the markets.

At the time, JPMorgan’s demand growth forecast for China stood at 770,000 bpd, which was lower than the projections of OPEC and the IEA.

According to JPMorgan, the existing imbalance between global supply and demand is expected to reach 1.1 million barrels per day (bpd) in 2025 but could escalate to a shortfall of 7.1 million bpd by 2030, as robust demand continues to outstrip limited supply.




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