Crude oil prices rallied sharply as market fears of another COVID-induced hit to demand failed to materialise. Supply-side constraints then sustained the rally. Strategists at ANZ expect the market to remain in deficit in Q1 2022.

Supply-side issues tighten the crude oil market

“With supply constraints likely to be a feature of the oil market for a while, we see markets pricing in a sizeable risk premium. This should offset headwinds from an Iran nuclear deal and a more hawkish Fed.”

“We have raised our short-term price target to $95/bbl.”