Oil Price Hits $100-a-Barrel Target

oil, saudi arabia oil

Global oil price continued to rise on Wednesday as traders and analysts saw the possibility that crude oil could rise above $ 100 a barrel this year for the first time since 2014.

While the US standard West Texas International, which was in the negative territory just over a year ago, also surged above that level, traders are increasingly betting that crude oil could soar to $ 100 a barrel by the end of the year from money speculation in New York and other malls that buy contracts at this price.

Christian Malek, the analyst for US banking giant JP Morgan who first suggested an impending “super cycle” in crude oil prices, told Arab News that $ 100 a barrel would be a difference by the year-end.

“To reach $100 in 2021 would require a significant uptick in demand in the second half, but that scenario is definitely possible as long as we don’t see a fourth wave of the COVID-19 virus,” Malek told.

Oil at that level would require a jump in demand to around 100 million barrels a day, pre-COVID levels, but Malek did not rule it out as economic recovery accelerated in most major world economies such as the US, China, and Europe. who forecast a future sharp spike in oil prices when they were hit by the pandemic last spring, said oil production was in a “straitjacket” due to financial and regulatory constraints in the industry.

OPEC + production under Saudi leadership and concerns about the ability of some OPEC + members to supply more production.

“Saudi Arabia, the UAE and Iraq probably have spare capacity, but it’s unlikely many of the others have the capacity they think,” Malek said.

They warned of supply risks due to major investment cuts since the pandemic price volatility, exacerbated by the shift in sentiment towards hydrocarbons in the US and Europe.

“There is an urgency to invest in spare capacity, otherwise we don’t see how the world will meet future demand. All of a sudden we could move from the scenario of ‘peak demand’ to ‘peak supply’, which is astounding,” said Malek.

Even the return of Iranian oil to the market, which some analysts feared, would push oil prices in the direction of “In fact, at some point we will need Iranian oil because we are running out of spare capacity

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