BofA: Crude Oil Prices to Hit $95 Per Barrel This Summer

SEATTLE (Oil Monster): Bank of America Merrill Lynch (BofA) has predicted higher crude oil prices this summer. The multinational investment bank revised upwards its price forecasts for WTI and Brent crude.

According to Francisco Blanch, global head of commodities and derivatives at Bank of America Research, the oil prices are likely to hit $95 per barrel this summer, mainly driven by several key factors including low oil inventory levels, ongoing OPEC+ production cuts, rising geopolitical tensions and robust economic growth.

BofA noted that the rising demand situation will likely push the world oil markets into a deficit of around 450,000 barrels per day (b/d) in 2Q24 and 3Q24. It raised the 2024 Brent and WTI crude oil forecasts to $86 and $81/bbl. The prices are seen peaking at around $95/bbl this summer.

The OPEC+ supply side measures have pushed crude oil volatility down to the lowest level in several years. The price projections for 2025 remains unchanged, mainly on account of anticipated firm supply growth from the Americas during the year. Meantime, the medium-term crude oil prices are likely to witness some upside risks, triggered by limited capital expenditures.