KUALA LUMPUR (Nov 10): Brent Crude oil prices could rise to as much as US$120 per barrel in the first half of 2022 on the back of the global gas crisis, surging air travel with international flights returning, and a comeback of Asian demand, said Bank of America.

Bank of America global head of commodities and derivatives research Dr Francisco Blanch in an interview with Bloomberg on Tuesday (Nov 9) said that while the U.S. is not very exposed to the natural gas crisis, Europe and Asia are, and the gas to oil switch will raise demand for crude.

Blanch said the other major driver of higher demand and higher oil prices would be a return of travelers after the U.S. re-opened borders to international vaccinated travelers on Monday.

He explained that there will be a booming air travel window for the next six months as well as Asia coming back with the vaccine rollout there.

However, he said that amid rising demand, the global oil market faces “supply rigidities”.

Blanch said these supply rigidities are both the result of the past and the future of the sector.

“The past supply rigidities lie in the “terrible returns” for the oil sector in the past six-seven years,” he said, adding that the future supply rigidities lie in the uncertainty over how oil demand will fare in the energy transition.