Brent to rise at fastest pace since 1970s over the next 3 years, BofA says

Brent has surged 18.6 per cent over the last month, aided last week by the outages in the US

(FILES) In this file photo taken on April 08, 2019 The Total Culzean platform is pictured on the North Sea, about 45 miles (70 kilometres) east of the Aberdeen, Europe's self-proclaimed oil capital on Scotland's northeast coast, on April 8, 2019. A barrel of Brent crude oil rose to $60 on February 8, 2021 for the first time in nearly a year, a sign that the oil market is looking toward recovery.  - 
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Brent, the international benchmark for crude, is expected to rise at its fastest pace since the 1970s over the next three years, potentially hitting $100 per barrel, according to the Bank of America.

In the medium term, the lender expects prices to average between $50 and $70 per barrel between now and 2026.

A return of global exports and industrial production to pre-Covid levels have bolstered expectations of a faster recovery in demand for crude.

Improving oil supply and demand fundamentals, unprecedented global fiscal and monetary stimulus and a stronger economy in China, the world's largest commodity importer, all indicate a broader recovery for crude.

BofA expects Opec+, which has been withholding 7.2 million barrels per day since the beginning of the year, to reverse course as prices continue to trade above $60 per barrel.

Brent has surged 18.6 per cent over the past month, aided last week by outages in the US, which halted around 4m bpd of production.

West Texas Intermediate, the benchmark tracking US crude grades, is also up 18 per cent over the past 30 days.

Brent, under which two-thirds of the world's oil is traded, was up 1.28 per cent to $66.21 at 6.32pm UAE time on Wednesday, while WTI was up 1.26 per cent at $62.45 per barrel.


Opec+, headed by Saudi Arabia and Russia, will convene next week to assess members' compliance to current curbs. The producers are widely expected to bring additional barrels back into the market. Saudi Arabia, which volunteered an extraordinary cut of 1m bpd is also likely to roll it back by the end of March.

"We believe that slower shale growth and oil price stability will likely require a continuation of Opec+'s market management beyond April 2022," BofA said in its report.

The bank cautioned of bearish risks for prices, including the possible return of Iranian barrels back to the market following the renegotiation of the Joint Comprehensive Plan of Action between the Joe Biden administration and Tehran.