Declining spare capacity adds to the risk of higher prices due to potential supply disruptions.
Barclays raised its 2022 Brent oil price forecast by $5 a barrel to $85 a barrel and by the same amount for WTI to $82, analyst Amarpreet Singh wrote in a review.
Oil markets get support from a very tight inventory situation and strong fundamentals, plus omicron virulence is lower.
This year's oversupply is expected to be slightly higher and inventory levels lower than expected, and the fact that much of the increase in oversupply will come at the expense of spare capacity means prices will continue to receive support.
Reduced spare capacity increases the risk of higher prices due to potential supply disruptions from more than a decade of political instability in Libya or a major military escalation between Russia and Ukraine.