Could oil prices hit $100 per barrel?

Could oil prices hit $100 per barrel?

Oil prices look set to temporarily hit $90 a barrel during the first half of next year, if not sooner, and risk spiking to as much as $100 a barrel, depending on geopolitical events and other factors, Bank of America Merrill Lynch analysts said.

But they do not see an immediate major jump in prices. For this year, they forecast an average price of $70 a barrel for Brent crude, the international benchmark. They forecast $75 for next year. Their previous forecast was $60.

The analysts have a target of $90 a barrel during the second quarter of 2019, with a risk it could go to $100 a barrel. Futures on Brent were trading as high as $78 yesterday.

"Looking into the next 18 months, we expect global oil supply and demand balances to tighten driven by the ongoing collapse in Venezuelan output. In addition, there are downside risks to Iranian crude oil exports. Plus we see a high likelihood of OPEC working with Russia in 2019 to set a floor on oil prices," CNBC cited the analysts as saying.

As for the U.S., they forecast WTI crude prices will be about $5 below Brent this year and $6 below next year, due to bottlenecks in transporting shale crude to market and because of capital constraints at drillers. WTI was trading just above $71 a barrel on yesterday.