The price of oil has reached its highest level of the year, but Bank of America Securities analysts predict it will go even high this summer, potentially reaching $95 a barrel. Brent crude futures contracts traded near $90 a barrel last week, with West Texas Intermediate trading at $86 a barrel for the first time since October 2023.
Dwindling supply, caused by OPEC’s and non-OPEC allies’ production cuts of 2.2 million barrels per day, has driven prices up. Additionally, attacks on merchant ships in the Red Sea and attacks by Ukraine on Russia’s refining infrastructure have also affected supply.
Economic forecasts suggest that the demand for oil in the U.S. will be higher than expected, with the analysts predicting that “lower interest rates and easier financial conditions will support rising commodity prices into summer.”
The oil deficit could reach up to 450,000 barrels per day in the second and third quarters of 2024. With that, the BofA analysts suggested as average price forecast for the year between $81 and $86 a barrel, with the peak at $95 a barrel this summer.
