OPEC member predicts oil to hit $100 by 2022

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A member country of the Organization of Petroleum Community (OPEC) has predicted that oil prices could hit $100 a barrel during the first half of 2022 amid low global commercial stocks.

Iraq’s Oil Minister Ihsan Abdul Jabbar Ismaael made this revelation on Wednesday.

At the same time, the minister told reporters in Baghdad that the OPEC+ group was considering ways to balance the market as the alliance does not want oil to exceed certain ‘acceptable’ levels.    An ‘acceptable’ long-term price range for oil prices would be between $75 and $85 per barrel, the Iraqi oil minister said.

The OPEC+ group is “at the same time against further boosting global oil inventories, as they could lead to the collapse of oil markets,” said the minister of OPEC’s second-largest producer behind Saudi Arabia.

At the end of last month, Jabbar Ismaael said that OPEC+ was working to keep oil prices around $70 per barrel. The official said the ministry hoped that oil prices would remain above $65 per barrel.

Since the minister said that the group was looking to keep prices around $70, oil has gained $10 per barrel.

Prices have rallied since the end of September, on the back of rebounding global demand amid weaker supply response from producers, including OPEC+ and the U.S. shale patch. The global energy crisis and record-high natural gas and coal prices further stoke demand for oil products, pushing forecasts of oil demand in the winter months higher.

While the Iraqi oil minister doesn’t rule out $100 oil in the first or second quarter of 2022, he warned the market earlier this month that a three-digit oil price would not be sustainable for the OPEC+ coalition, which works for stable and predictable markets.

Yet, the Iraqi oil minister is not alone in his prediction that oil could reach $100 early next year.

Oil prices could hit $100 in case of a colder winter, some analysts and investment banks have said in recent weeks.

Surging natural gas prices, a cold winter, and reopening of international airline travel could push oil prices to $100 per barrel, Bank of America said in early October. But $100 oil could also trigger the next global economic crisis due to the high inflationary pressure, the bank noted.