Even as the crude oil prices have hit the highest level since October 2018, the commodity is likely to retain its volatile character this winter.
As per the market reports, the Brent crude oil prices today was quoted at around $82.55 per barrel. The price on November 4 was $84.15 per barrel. A look at the futures contract of Brent crude oil reveals that the prices may dip to $79.66 by April 2022.
A detailed look at futures trading reveals that the price of Brent Crude will remain at around $82 per barrel. The prices are set to ease down further to $81.50 per barrel in February 2022. And the contracts show that it will drop to $79.66 per barrel by April 2022.
If futures trading contracts are to be believed then the international crude oil prices will cool down to $76 per barrel by October 2022.
However, if the prediction of merchant/investment bankers is to be believed, then the crude oil price will touch $90 per barrel from December to March 2022. The prediction is the price will settle at around $85 per barrel during the whole year of 2022. This means no respite for the common man in the coming days.
"The OPEC+ countries are required to raise their production to 3.76 million barrels per day. But many member countries are struggling to increase their production. Against this backdrop, our expectation is the brent crude to trade at $90/bbl in December and March, before levelling off to $85/bbl for the rest of 2022," said a UBS analysis.
The La Nina Impact
Many other investment bankers also predict a volatile situation if the winter turns out to be colder than usual. And in that scenario, the crude price may touch $100 per barrel.
As per Goldman Sachs, if the OPEC+ countries continue with the current path of +0.44mb/day, then the prices may shoot up to touch $110 per barrel in 2022.
The CEO of the world's largest asset manager, Larry Fink, there is a high probability of crude oil prices touching the $100 per barrel mark in near future.
However, U.S. oil supermajor Chevron doesn't agree with the bullish predictions. Terming the tight price as cyclical than structural, Chevron’s CFO Pierre Breber had recently said, " Oil supply next year is expected to rise with OPEC+ unwinding the remaining production cuts and the potential of Iranian barrels returning legitimately on the market. This quarter’s oil supply deficit is expected to turn into a surplus around the middle of 2022.
The Bottom line
The futures trading prices and predictions by US-EIA, Chevron have one common congruence. The crude oil prices will witness a cool down only by mid -2022. Still then, the volatility may rule.