According to a report cited by Forexlive from JPMorgan, the price of WTI crude oil may skyrocket to $100 per barrel within the next year due to weakening incentive for producers to increase output.

The investment bank estimates that the equilibrium price for WTI crude oil, the US benchmark, is currently around $70 per barrel.

Even prices higher than $60 per barrel would still be too low to stimulate production, leading to a potential surge in oil prices to $100 per barrel, according to Forexlive.

On Thursday, WTI crude oil prices rose slightly due to a larger-than-expected decrease in US crude oil inventories and an increased possibility of the Fed announcing its first interest rate cut in September.

Earlier this week, oil prices remained low due to concerns over demand prospects, but rebounded on Wednesday morning after the EIA released its weekly crude oil inventory report. The report showed that commercial crude oil inventories decreased by 4.9 million barrels for the week ending July 12. The American Petroleum Institute also reported on Tuesday that crude oil inventories for the same week decreased by 4.44 million barrels due to the peak demand season.

Currently, US crude oil inventories are about 5% below the five-year average for the same period.

Wall Street banks and analysts forecast that oil prices will be strongly supported in the third quarter at levels above $80 as demand soars in the northern hemisphere. For example, ING Groep predicts that Brent crude oil prices will reach $88 per barrel in the third quarter of 2024 and fall to $80 per barrel by 2025. The main risk to this outlook is that if OPEC+ decides to maintain its full production cut level, the market deficit could be extended until 2025.

The bank pointed out that OPEC+ policy is crucial for the oil outlook for the last few months of this year and next year. OPEC+ agreed last month to remove voluntary production cuts of 2.2 million barrels per day starting in October. When oil prices immediately fell, officials emphasized that the committee could postpone the increase in production if necessary, and the market rebounded subsequently, easing the urgency.

On Thursday, foreign media reported that OPEC+ representatives do not expect any change in the plan to increase production from the fourth quarter at the organization's regular meeting on August 1. Attendees said there is currently no plan for the Joint Ministerial Monitoring Committee to make any recommendations on production policies. This gives OPEC+ several weeks to consider whether to continue to increase supply, theoretically until early September, when customers need to confirm cargo allocation.

ING Groep noted that the supply cuts by OPEC+ in the coming months will result in a huge market deficit, but the loosening of these cuts starting in the fourth quarter will mean that supply will become more abundant. Therefore, oil prices are expected to peak in the third quarter and then trend downward in the fourth quarter and next year.

ING Group pointed out that the supply cuts of OPEC+ over the next few months will lead to a huge deficit in the market. However, the relaxation of these production cuts starting in the fourth quarter will mean a more relaxed supply, so it is expected that oil prices will peak in the third quarter and then trend downward in the fourth quarter and next year.