Bank Of America Expects Fastest Oil Price Rise In 30 Years By Irina Slav - Feb 25, 2021, 9:00 AM CST https://oilprice.com/Energy/Oil-Prices/Bank-Of-America-Expects-Fastest-Oil-Price-Rise-In-30-Years.html Oil prices are set to rise by the fastest rate since the 1970s over the next three years, Bank of America said in a new report, joining the growing group of analysts forecasting a return of oil to three-digit territory. The average price of Brent over the next five years, however, will be between $50 and $70 per barrel, according to the bank, as quoted by The National. The bank also said OPEC+ might decide to reverse its production cuts now that Brent is trending above $60, but added that a slow return of U.S. shale to international markets might lead to an extension of the production cut agreement to make sure prices stay higher. "We believe that slower shale growth and oil price stability will likely require a continuation of Opec+'s market management beyond April 2022," the bank's analysts said. OPEC+ is meeting next week to discuss the progress of its agreement in an environment of much tighter supply, and expectations are that some members may push for a production increase. The increase, however, will be moderate, at 500,000 bpd, according to reports. The last Joint Ministerial Monitoring Committee of OPEC+ met in the first week of February, and the meeting ended without many surprises. For the month of February, another 75,000 bpd was added to the quotas—65,000 bpd to Russia and 10,000 bpd to Kazakhstan. For the month of March, production quotas were eased again by the same amount, with the same distribution of the additions. Russia is one of the extended cartel's members that will likely call for a further increase in production. Moscow has a tradition of budgeting for pessimistic oil prices, which increases the benefits from each additional dollar benchmarks gain. Saudi Arabia, on the other hand, might like to see much higher prices as its breakeven level, despite the lowest production costs in the world, remains quite high. By Irina Slav for Oilprice.com
(Reuters) - Oil prices rebounded more than $1 on Monday after the U.S. House of Representatives passed a huge stimulus package, although a drop in China's February factory activity growth capped gains. Brent crude futures for May rose $1.07, or 1.7%, to $65.49 per barrel by 0410 GMT. The April contract expired on Friday. U.S. West Texas Intermediate (WTI) crude futures jumped $1.01, or 1.6%, to $62.51 a barrel. Front-month prices for both contracts touched 13-month highs last week, slipping back on Friday along with wider financial markets following a bond rout amid inflation fears. "Oil prices are recovering this morning in line with most risk assets on the back of the U.S. stimulus bill passing the House," Stephen Innes, chief global markets strategist at Axi, wrote in a note on Monday. The U.S. House passed a $1.9 trillion coronavirus relief package early on Saturday, lifting investors' risk appetite and Asian stock markets. The package will now move to the U.S. Senate for further deliberation. The approval of Johnson & Johnson (NYSE:JNJ)'s COVID-19 shot also buoyed the economic outlook. Manufacturing data from top Asian oil importers were mixed, however, as China's factory activity growth slipped to a nine-month low in February, while manufacturing in Japan expanded the fastest in more than two years. Crude supplies going into top importer China are expected to ease in the second quarter as the oil price rally cooled demand. Preliminary data also showed that South Korea's February imports are down 14.7% from a year earlier. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, will meet on Thursday and could discuss allowing as much as 1.5 million barrels per day of crude back in the market. "We think if the combined (OPEC+) increase does not exceed 500,000 bpd, that will be bullish for prices," analysts at Singapore's OCBC bank said. Separately, Iran on Sunday dismissed opening talks with the United States and the European Union to revive the 2015 nuclear deal, insisting Washington must first lift the unilateral sanctions that have sharply reduced Iranian oil exports.
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