Oil set to miss out on supercycle bounty

Consultancies warn that a sluggish demand outlook will largely prevent crude from joining in any sustained post-Covid price spikes

Forecasting crude oil prices has always been a mug’s game. There are so many expected and unexpected factors that can impact market fundamentals. And prices may verge far from the cost of the marginal barrel—even for extended periods—due to the impact of rational or irrational market expectations on trading activity. Despite this, banks and energy consultancies continue to make educated guesses on what oil prices will be in the short, medium and longer term. At the present time, three macro—and in certain ways interrelated—themes appear to be driving oil price forecasts: The possibility of yet another commodity supercycle; The timing of peak oil demand (POD) and how rapidly oil consumption