The markets are not headed to a new supercycle in oil, and $100 a barrel oil is still a very distant possibility unless major unexpected market shocks occur, analysts at the Oxford Institute for Energy Studies (OIES) said in their latest monthly short-term outlook.

Despite the rising prices so far this year, and despite the expectations of improving global oil demand, especially later this year, the market is still missing key triggers of an oil supercycle, OIES researchers and economists noted.

As oil prices rallied earlier this year, some banks, including JP Morgan and Goldman Sachs, said in February that they expected a new supercycle in oil, with economies rebounding from last year’s pandemic shock.

The International Energy Agency (IEA), however, does not see a supercycle in oil on the horizon amid plentiful supply and a large global spare capacity.

“Oil’s sharp rally to near $70/bbl has spurred talk of a new super-cycle and a looming supply shortfall. Our data and analysis suggest otherwise,” the IEA said in its Oil Market Report for March.

Since the rally to $70 a barrel in early March, oil prices have now dropped by more than $5 a barrel, with Brent Crude trading at around $64 early on Tuesday, weighed down by concerns about demand recovery amid extended lockdowns in major European economies and renewed lockdowns in major oil importer India.

“The recent oil price rebound does not yet signal the start of the next oil supercycle as the key triggers are still missing,” OIES analysts wrote.

Those missing triggers are inelastic supply amid soaring demand and lack of space capacity and refining constraints.

Oil prices will depend on the pace of demand recovery and are likely to trade in the $59-$69 per barrel range for the rest of 2021 and 2022 on an annual basis. Monthly oil prices will be range-bound in the $54-$74 range. Even if market sentiment pushes prices beyond those ranges, they are unlikely to be sustainable, according to the OIES analysts.

“For prices to reach anywhere close to $100/b, we need to consider other shocks,” they added.