Oil prices have shot up in 2022.
Tetra Images – Dan Bannister
- Bank of America said it sees US oil prices surging around 16% to $140 a barrel by the summer.
- A BofA strategist said recent trading patterns are positive for WTI crude, with prices currently at around $120.
- UBS said it thinks the reopening of Chinese cities from strict zero-COVID lockdowns will boost prices.
Bank of America analysts have said WTI oil, the US benchmark, could jump around 16% to $140 a barrel this summer based on current trading patterns.
Oil prices have surged this year, largely as a result of Russia’s invasion of Ukraine. WTI crude has risen more than 50% to trade just under $121 a barrel Wednesday.
BofA analyst Paul Ciana said in a note Tuesday that recent trading patterns in WTI oil were “bullish” — that is, suggestive that prices are heading higher.
He noted that prices rose to $130 a barrel in March before cooling, but are now on the up again, suggesting there is momentum behind the asset.
“Price has corrected and rounded out a bullish continuation pattern pointing to $140 a barrel this summer,” Ciana wrote.
Ciana added that historically prices have tended to move higher when WTI crude has traded above $115 a barrel. WTI has traded above this level since the start of June.
Many in investing are skeptical of chart analysis, however, arguing that an asset’s past moves are not a reliable guide to the future.
Yet analysts at UBS said Wednesday that there are plenty of economic reasons to expect oil to keep rising: chief among them the loosening of COVID lockdowns in China.
“We expect near-term oil prices to be supported by China’s economic reopening and the Northern Hemisphere summer season,” UBS Wealth Management chief investment officer Mark Haefele said in a note to clients.
Haefele said investors should consider investing in oil futures as a way to benefit from the reopening of China this summer.
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