Crude oil rates will flareup to $150 per barrel, warns JP Morgan

Washington: – A senior official at the international financial institution JP Morgan has warned that the OPEC or the affiliated countries cannot fulfil the demand while the crude oil rates are increasing. Therefore, the rates for crude oil could flare up to the $150 per barrel levels in the next two years. Fears of the new variant of Coronavirus have dropped the crude oil rates to $70 per barrel and below. Against this background, the warning issued by JP Morgan becomes noteworthy.

Christyan Malek, chief of the Oil and gas research at JP Morgan, claimed, the OPEC countries have huge underground oil reserves. But these countries do not have the technology and capital necessary for increasing the supply by increasing oil production immediately. Therefore, the oil reserve in these countries is just a mirage. Malek pointed out that the OPEC countries cannot immediately make additional crude oil if the oil rates get out of control.

Malek warned that the crude oil rates could flare up to $125 per barrel and $150 per barrel in 2022 and 2023, respectively. He also claimed that the OPEC and the affiliated countries would reduce production if the demand dips given the Coronavirus pandemic. This is the second major warning issued in the last two weeks over the possible increase in the oil rates. Two weeks ago, Rosneft, known as one of the leading oil companies, predicted a rise in crude oil rates.

Otabek Karimov, Vice President of Rosneft, had warned that the oil rates will jump to $120 per barrel in the second half of 2022. In support of his claim, he had pointed out that the rates would increase as there was no possibility of increasing the production and the low level of investment. Last month, the crude oil rates scaled the record level of $86 per barrel. Currently, the crude oil rates have come down to $70 per barrel due to fears regarding the new Coronavirus variant ‘Omicron’.