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JPMorgan expects oil prices to reach $125 in 2022

JP Morgan said on Wednesday it expects excess capacity in the Organization of the Petroleum Exporting Countries (OPEC) to decline over the course of 2022, raising the risks of a sharp increase in crude prices.

The US investment bank expects that Oil prices rise It will reach $125 a barrel this year and $150 a barrel in 2023. “We see a growing recognition in the market of weak global investment in supply,” he said.

Oil prices hit two-month highs on Wednesday, supported by a supply shortage, as crude stocks in the United States, the world’s largest consumer, fell to their lowest levels since 2018.

The bank said in a note that assuming production at the current quotas, the surplus production capacity of OPEC will fall to 4% of the total production capacity by the fourth quarter in 2022, from 13%, in the third quarter in 2021.

He added that the weak investment within the OPEC + countries and the increasing demand for oil after the pandemic may lead to a potential energy crisis.

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