A truck passes pumpjacks in the Belridge oil field.
Goldman Sachs predicts a new high in oil demand in the future.
The head of energy research at the investment bank said Friday that $100 per barrel was a possibility.
Demand for oil was already at a record high before the latest omicron variant hit, and demand for air travel should continue to recover, he said.
Courvalin said in an energy outlook briefing with reporters on Friday that the global economy is still growing, and that there has already been record high demand before this newest variant. We will have a new record high in demand in 2022, and again in 2023.
The price of both international benchmark crude and U.S. crude has gone up in recent months as demand outstrips supply. Natural gas prices have caused crises around the world.
The omicron variant has caused prices to go back to $70 in recent weeks.
Courvalin expects restrictions that were hurting air travel to be loosened.
He said that air travel has been slow to recover because of Asia. Australia, New Zealand and Singapore were very aggressive in limiting international transfer. That is easing, he said.
He predicted that oil prices will be $85 per barrel for the next four years, with an upside risk that prices could go $5 to $10 higher.
Courvalin said that he would not rule out the possibility of oil prices hitting $100, and that there are two paths that could lead to that.
As oil companies ramp up production costs go up. He said inflation is everywhere in the economy and eventually in oil services.
If the supply of oil can't meet the demand, that's the other possibility.
Courvalin said oil prices could go as high as $110 if demand destruction occurs. That is quite conceivable, he said.
When demand plunges during a brief period of high prices, it's called demand destruction, and it's caused by high oil prices.
The Organization of the Petroleum Exporting Countries and its allies, including Russia, have said they could meet earlier than planned if the demand outlook changes. According to the report, there will be 400,000 barrels per day of supply in January.
