Will crude oil prices continue their recent dramatic boom as the pandemic recovery takes hold? Perhaps not.
The International Energy Agency said Wednesday that it does not expect oil to enter a “supercycle,” or extended period during which prices rise well above their long-run trend.
“Oil’s sharp rally to near $70 per barrel has spurred talk of a new supercycle and a looming supply shortfall. Our data and analysis suggest otherwise,” the IEA said in its latest monthly report. Some analysts are expecting crude prices to surge near $100 per barrel as coronavirus lockdowns end and travel resumes. But the IEA, which monitors energy market trends for the world’s richest countries, thinks there is too much oil sloshing around global markets for a supercycle to take hold.