President Putin predicts oil to reach US$ 100 per barrel | Daily News

President Putin predicts oil to reach US$ 100 per barrel

Could trigger next economic crisis
OPEC+ to raise production
High prices for next several years

It is “quite possible” that the WTI Crude Oil prices could reach US$ 100 per barrel in light of growing global demand for energy commodities, Russian President Vladimir Putin said on a CNBC panel at the Russian Energy Week on Thursday.

Asked by CNBC’s Hadley Gamble whether the U.S. benchmark could hit US$ 100 a barrel, Putin replied “That is quite possible” and warned of the economic consequences of such a move.

Oil prices could hit US$ 100 in case of a colder winter, some analysts and investment banks have also said in recent weeks. Record-high natural gas prices are forcing some utilities to switch to oil derivatives instead, boosting demand for crude.

Surging natural gas prices, a cold winter, and reopening of international airline travel could push oil prices to US$ 100 per barrel and trigger the next economic crisis, Bank of America also warned. Recovering global oil demand could send oil prices to US$ 100 a barrel at some point despite COVID challenges to demand this coming winter, according to one of the world’s largest independent oil traders, Trafigura.

However, Russia and its allies in the OPEC+ oil producer group want a stable oil market without any shock spikes in prices, Putin said.

“Russia and our partners and OPEC + group, I would say we are doing everything possible to make sure the oil market stabilizes,” Putin said, according to a translation.“We are trying not to allow any shock peaks in prices. We certainly do not want to have that — it is not in our interests,” the Russian president added.

The OPEC+ group decided last week to stick to their planned 400,000 barrels per day (bpd) increase in collective production in November, despite calls from oil importing nations to add more supply and despite an expected additional demand from a gas-to-oil switch due to record high natural gas prices in Europe and Asia.

Oil prices could stay at higher levels in the years to come as demand rebounds while supply remains tight, according to Goldman Sachs’ head of energy research.

Damien Courvalin, who is also a senior commodity strategist, said the market fundamentals warrant higher prices and that the bank’s forecast for Brent crude is US$ 85-100 per barrel for the next several years.“This is not a transient winter shock like it could be for gas. This is actually the beginning of a material repricing higher for oil,” he told CNBC’s “Street Signs Asia” on Thursday.Goldman Sachs’ base case is for Brent to hit US$ 90 per barrel by the end of the year.

The oil market is in “the longest deficit we’ve seen in decades,” and demand will continue to outstrip supply in winter, said Courvalin. The lack of upstream investment in oil supply while demand grows points to “sustained high prices” at least in the year ahead, he added. (CNBC)


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