Oil prices are headed to $150 a barrel as energy demand continues to outpace supply, JPMorgan energy strategist says

• Oil could soar to $150 a barrel as demand still outpaces supply, a JPMorgan strategist said.
• That's because companies aren't investing enough in future production, which promises a major supply deficit ahead.

Oil prices are still headed to $150 a barrel as supply growth continues to lag, according to JPMorgan energy strategist Christyan Malek.

Brent crude oil rose 1% to about $94 a barrel Wednesday but is well off its earlier high of more than $130 a barrel in March.

While some analysts have cut their oil price outlooks, Malek said JPMorgan still stands by its price target of $150 a barrel.

He noted that the volatility in the energy market was leading companies to underinvest in future production, which OPEC+ has previously blamed for high oil prices. In fact, US rig counts have started to decline again, and that spells trouble for future supplies.

"Most companies that ought to be investing in future production, particularly the majors, are not. So essentially, [they're] kicking the can down the road in the tightening of fundamentals," Malek said.

Saudi Arabia, one of OPEC+'s largest oil producers, said that it hiked production to over a 11 million barrels a day last month. But Malek didn't believe that would be enough to keep up with demand if domestic companies didn't step up as well.

"It can't be just OPEC that underwrites or fills in the deficits when needed ... In the end, we're going to see a structural deficit that cant be managed or met quickly enough," he warned.