JPMorgan says two factors could push oil prices up an additional $ 5-10 a barrel

SINGAPORE – JPMorgan says crude prices could see higher and higher as oil continues to post strong gains so far this year.

This comes against the backdrop of an improving global outlook as major economies continue their ongoing coronavirus vaccination campaigns.

“I think there’s room for oil prices to go up a bit in this environment, but, you know, don’t think of a price of $ 80 or $ 90 a barrel. Maybe it’ll go up. $ 5 or $ 10 more from here, “Kerry Craig The global market strategist at JPMorgan Asset Management told CNBC on Friday” Street Signs Asia. “

In the afternoon of Asian trading hours on Friday, international benchmark Brent futures were at $ 62.91 per barrel. US crude futures changed hands at $ 59.34 a barrel. Brent and West Texas Intermediate crude futures have risen more than 20% each so far in 2021.

Oil prices have moderated in recent days after hitting their highest level in over a year.

Just this week, a deadly winter storm in the southern United States brought days of blackouts to Texas, devastating the state’s energy infrastructure and wiping out millions of barrels a day of oil production. Energy prices exploded as a result of this development.

There are two things that are likely to push oil prices up, according to Craig.

First, demand for oil is expected to pick up as the global economy recovers from the blow from the coronavirus pandemic, he said. However, this will be “reduced to some extent” due to the low probability that international travel will return soon. Travel is a “major source of demand,” he added.

On the supply side, he said: “We are still counting on these OPEC + members to keep this supply relatively small and I think there is still a question about this in terms of the amount of the supply. supply versus demand. “

OPEC and its allies, known collectively as OPEC +, have sought to navigate their way through a historically tumultuous period that has included an unprecedented collapse in oil prices as well as a major demand shock. fuel in the midst of the pandemic.

– CNBC’s Sam Meredith, Jeff Cox and Pippa Stevens contributed to this report.

Subscribe to CNBC PRO for exclusive news and analysis, and live business day programming from around the world.