Oil prices above $200 a barrel – Morgan Stanley expects oil to “crush” all investments in 2023

While oil is holding steady at prices between $80.12 and $85 a barrel, Goldman Sachs analysts believe oil will hit $110 a barrel for Brent, and Morgan Stanley strategists also believe oil will hit $110 a barrel by mid-2023. The founder of Praetorian Capital recently warned that oil could jump much higher next year.

Economists expect oil prices to rise sharply in 2023, with some warning to expect $100 a barrel oil next year and others saying crude could exceed $200 a barrel.

Reports show that Wall Street is bullish on oil compared to stocks, cryptocurrencies, and precious metals. Oil’s value has jumped sharply this year amid rising inflation and the start of the Ukraine-Russia war. On March 8, 2022, the same day that gold hit its record price, Brent crude oil was trading at $126 per barrel. After the 2022 peak, oil fell to $96 a barrel eight days later, on March 16. It then recovered throughout April and May, and by June 8, Brent crude was trading around $122 per barrel.

Since that day, Brent crude has dropped 31% against the U.S. dollar, falling to the $85 range on December 27, 2022. Despite the drop, many investors and Wall Street figures believe oil will be the best investment next year. Hedge fund manager and Praetorian Capital founder Harris Kupperman is one market strategist who believes oil “will crush“all other investments in 2023. Harris Kupperman’s portfolio view, shared on Quoth the Raven’s substack, not only will oil outpace all other investments, but Harris Kupperman predicts that the barrel will exceed $200.

“My strongest opinion is that 2023 is the year that oil will crush all others CUSIP“, wrote the founder of Praetorian Capital. “Once again, I think it’s important to reiterate that if you haven’t tested your portfolio for oil prices above $200, you’re going to suffer dearly when that should happen.“

Harris Kupperman isn’t the only investor predicting higher oil prices next year. Jeff Currie, the global head of commodities at Goldman Sachs, thinks Brent will hit $110 next year. In a note to clients, Morgan Stanley shares the same view of higher oil prices in 2023. “We remain constructive on oil prices driven by demand recovery (China reopening, aviation recovery) in a supply-constrained environment due to low investment levels, Russian supply risks, the end of SPR releases and the slowdown in US shale“, noted Morgan Stanley analysts.

Jay Hatfield, CEO of Infrastructure Capital Advisors, detailed on Dec. 23 that his firm expects $80-100 a barrel “As long as the Ukrainian war continues“. Jay Hatfield also stated that he expects China’s oil demand to “will recover as it moves out of the zero-covid lock-in policy.“An article published by Enverus Intelligence Research (EIR) warns that the price of oil at $100 per barrel will return in 2023. The EIR report states that the rise will materialize due to sanctions on Russian oil and supply management by the Organization of the Petroleum Exporting Countries (OPEC).