Oil projected to hit $90-$100 range
Oil prices could hit the $90-$100 per barrel range in the second half of this year as global demand is set to reach record levels amid constrained supply, Russell Hardy, CEO at the world’s largest independent oil trader, Vitol Group, has said
“The prospect of higher prices in the second half of the year, in the sort of $90-$100 range, is a real possibility,” Hardy told Bloomberg in an interview.
According to Hardy, global oil demand will rise by 2.2 million barrels per day (bpd) in 2023 compared to 2022 and will reach a record level, driven by a jump in diesel, naphtha, and liquid petroleum gas (LPG) demand.
“You don’t have much room on the supply side in reality, so the potential for a rally is certainly there,” Hardy told Bloomberg.
Peak oil demand is expected to co, me around the end of this decade amid rapid decarbonisation, but investment in oil supply will still be needed, Vitol’s top executive said.
Major U.S. shale operator Pioneer Natural Resources also sees $100 per barrel by the end of the year, while some banks are not convinced prices will hit triple digits in 2023.
With a significant pickup in Chinese demand, Brent Crude prices “will break $90 this summer and climb back up to $100 sometime in the second half of the year,” Pioneer CEO Scott Sheffield said earlier this month.
Brent Crude prices are not expected to reach $100 per barrel in 2023 unless a major geopolitical event rattles markets again, JPMorgan said this month.
Russian crude oil production is expected to recover by June, while high price levels would prevent the U.S. from repurchasing crude to refill the Strategic Petroleum Reserve (SPR), according to the Wall Street bank.
Goldman Sachs, for its part, still expects Brent Crude to hit $100 per barrel this year, but only in December, compared to earlier expectations of $100 oil as soon as mid-2023. Earlier this month, Goldman Sachs cut its average Brent price to $92 a barrel this year from $98. Despite the cut in oil price forecasts, Goldman Sachs is still one of the most bullish Wall Street banks on crude oil and commodities in general. Goldman continues to believe that there is a new supercycle in the making.
Get the latest news delivered straight to your inbox every day of the week. Stay informed with the Guardian’s leading coverage of Nigerian and world news, business, technology and sports.