Business Insider: Jan 12, 2022

Oil prices that rallied 50% in 2021 will power further ahead this year, some analysts predict, saying a lack of production capacity and limited investment in the sector could lift crude to $90 or even above $100 a barrel.

Though the Omicron coronavirus variant has pushed COVID-19 cases far above peaks hit last year, analysts say oil prices will be supported by the reluctance of many governments to restore the strict restrictions that hammered the global economy when the pandemic took hold in 2020.
Brent crude futures traded near $85 on Wednesday, hitting two-month highs.

“Assuming China doesn’t suffer a sharp slowdown, that Omicron actually becomes Omi-gone, and with OPEC+’s ability to raise production clearly limited, I see no reason why Brent crude cannot move towards $100 in Q1, possibly sooner,” said Jeffrey Halley, senior market analyst at OANDA.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, are gradually relaxing the output cuts implemented when demand collapsed in 2020.
However, many smaller producers can’t raise supply and others have been wary of pumping too much oil in case of renewed COVID-19 setbacks.
Morgan Stanley predicts that Brent crude will hit $90 a barrel in the third quarter of this year.

With the prospect of depleting crude inventories and low spare capacity by the second half of 2022, and limited investments in the oil and gas sector, the market will have little margin of safety, the bank said.

JPMorgan analysts said in a note on Wednesday that they could see oil prices rising by up to $30 after the Energy Information Administration (EIA) and Bloomberg lowered OPEC capacity estimates for 2022 by 0.8 million barrels per day (bpd) and 1.2 million bpd respectively.

However, the bank added that it also expects oil prices to “overshoot” to $125 a barrel this year, and $150 in 2023.

Rystad Energy’s senior vice-president of analysis Claudio Galimberti said if OPEC was disciplined and wanted to keep the market tight, it could boost prices to $100.

However, he said he did not consider this a likely scenario and while oil could “momentarily” reach above $90 this year, downward pressure on prices would come from production increases in Canada, Norway, Brazil and Guyana.

Omani Oil Minister Mohammed Al Rumhi also said on Tuesday that the group doesn’t want to see $100 barrels of oil.

“The world is not ready for that,” Al Rumhi was quoted as saying by Bloomberg.

High oil prices, which also drive up gasoline and diesel prices, could keep inflation uncomfortably high well into 2022 amid snarled global supply chains, slowing the economic recovery from the pandemic in many countries.

Standard Chartered, meanwhile, has raised its 2022 Brent forecast by $8 to $75 a barrel and its 2023 Brent forecast by $17 to $77.

In a Reuters poll in late December, 35 economists and analysts forecast Brent would average $73.57 a barrel in 2022, about 2% lower than $75.33 consensus in November. The forecast shows the average price for the yeaMillennials have had their fair share of economic challenges, but for the oldest members of the generation, unemployment isn’t currently one of them.

They’re the only cohort with a higher number of employed people than before the coronavirus
recession
, according to Insider’s analysis of Bureau of Labor Statistics data.

Only 199,000 nonfarm payrolls were added in December, which followed November’s low gains of a revised 249,000. But despite these discouraging gains from the establishment survey, employment from the household survey rose by 651,000 in December.

And monthly employment changes by age group varied, with older millennials looking at an especially healthy work situation.

Americans aged 35 to 44 — which includes the oldest millennials and the youngest Gen Xers — are the only cohort among six age groups tracked by the BLS to be at or above its pre-pandemic employment level from February 2020, as of December 2021, as seen in the chart below. December was the first month that the age group surpassed pre-pandemic employment. The unemployment rate for those 35- to 44-years-old was 3.3% in December, below the national unemployment rate of 3.9%.

Gen Z was a different story. Americans between ages 16 and 19 were just above pre-pandemic employment back in April, but that didn’t last long. By June, this teenage group had dipped below its employment level from February 2020 and hasn’t gotten back since.

Although they’ve seen employment gains in recent months, younger workers in the 20- to 24-year-old age group still have some way to go before getting back to pre-pandemic levels. They’ve had the largest percent decrease from February 2020 employment among the six groups as of December.

As for the rest of millennials, the majority of the 25 to 34 age group, their employment recovery sits in the middle of the pack among the cohorts.

Older millennials have the upper hand at work
These findings seem to show the eldest millennials have come a long way since graduating into the Great Recession’s blighted job market. It was a rocky start in which many juggled “lower-quality” jobs until they could find ones that landed them on their feet.

But two recessions later, they have the upper hand in the workplace. Not only are they the most employed age cohort, but they also bring the most skills to the table.

Informally known as “geriatric millennials,” a term popularized by the author and leadership expert Erica Dhawan to refer to those born in the first five years of the generation, or between 1981 and 1985, this group straddles a digital divide between older and younger generations in the workplace.

Dhawan previously explained to Insider that this enables them to serve a hybrid role in the workplace by bridging communication styles — teaching traditional communication skills to younger employees and digital body language to older team members.

This means their skill set is in high demand, giving them greater freedom to quit and seek out better and higher-paying jobs. An analysis last year by Harvard Business Review found that midcareer employees are driving the Great Resignation. Resignation rates are highest among 30- to 45-year-old employees, increasing on average by more than 20% over the past year.

The reasons for the resignations are plenty, according to HBR, including more demand for midlevel workers and a catch-up in postponed job switching now that the dust has settled from the pandemic’s economic effects. Given both their high employment rates and high quitting rates, older millennials are likely doing exactly that: leaving one job for a better one.

It’s no wonder, then, that the geriatric millennial is now winning at work.