Crude oil prices may soon hit $150 per barrel or more this year, Trafigura’s CEO Jeremy Weir told the FT Global Boardroom conference on Tuesday.
The spike in crude oil prices would likely trigger demand destruction for the commodity, Weir added.
The forecast is just $10 per barrel over where Brent prices shot up to in March shortly after Russia invaded Ukraine.
Bullish factors continue to be the Russia factor—with the EU recently agreeing to an embargo on imported Russian oil, although that will not go into full effect for many months—as China’s soon-to-be surge in crude oil demand, which is expected to rebound as the Asian nation rolls back its strict Covid lockdown measures.
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Brent crude is currently trading above $119 per barrel.
The oil price predictions follow other analyst predictions this week, with Goldman raising its price target for Brent to $140 in the third quarter of this year. Citi also lifted its oil price forecast, to $113 per barrel for the second quarter, and $99 per barrel for the third quarter. Barclays sees oil prices averaging $111 this year—an $11 per barrel price increase from its last estimate.
The price predictions vary wildly – a $40 swing—but so do their reasons for making the upward adjustments. Citi cits a delayed Iran deal, Barclays cites the EU ban on Russian crude oil imports, while Goldman’s price estimation was largely a factor of increased Chinese demand.
Other bullish factors include Saudi Arabia’s recently announced price hikes to its prized market, Asia, and OPEC+’s move to increase production more than it was expected to, signalling to the market that the group sees a need for more oil—now.
Another bullish factor for oil is the question of OPEC+’s ability to meet its new targets.
Trafigura added to its oil price prediction that the company was effectively finished with winding down its Russian business due to the Western sanctions on Russia.