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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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The Oil Bulls Betting On $150 Crude

The current oil crisis will severely depress investments in new oil production, setting the stage for oil prices hitting $100 or even $150 a barrel over the next five years, several analysts told The Wall Street Journal.

Analysts are basically divided into two camps – the ones predicting high oil prices because of the pandemic and the resulting severe underinvestment in new oilfields, and the ones saying that life in the new normal will mean that demand may never return to pre-COVID-19 levels.

In the bulls’ camp, Trevor Woods, chief investment officer of Ohio-based hedge fund Northern Trace Capital, told the Journal:

“We could hit $150 pretty easily by 2025.”

Woods motivated his prediction with upcoming massive pressure on producers for funding new developments.  

Christyan Malek, JP Morgan’s head of oil and gas research for Europe, the Middle East, and Africa, also thinks that oil could hit $100 per barrel, due to the dramatic decline in investments.

According to the International Energy Agency (IEA), the oil and gas sector will see the steepest decline in investment this year compared to last year. Investment in oil and gas is set to plunge by $244.1 billion, or by nearly one-third, in 2020 compared to 2019. 

“Could we see oil move to $100 over the next two years?” “Absolutely,” JP Morgan’s Malek told the Journal, reiterating a similar bullish estimate from last month.

Citigroup, however, doesn’t believe that crude oil prices will return to three-digit levels ever again.

The idea of oil at $100 or higher, “has far more fantasy than reality at its heart,” Citigroup commodity analysts said in a note earlier this month, adding that over the long term, $45 per barrel of Brent was a far more likely oil price scenario than $60 a barrel.

In more pessimistic news, the Citi analysts said, “Oil product demand growth will falter significantly, change its contours and never return to pre-covid-19 rates of growth.”

By Tsvetana Paraskova for Oilprice.com

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Leave a comment
  • Victor Edwards on July 11 2020 said:
    Perhaps. But by then no one will be using oil products. EVs are going to render oil obsolete, and it is coming a whole lot faster than Big Oil wants to admit.
  • Bill Simpson on July 12 2020 said:
    It might hit $100, but I doubt it will hit $150 before close to 2030. Too many electric cars will begin replacing the ICE ones by 2025, and air travel will remain depressed for several more years due to COVID-19.
    More people working from home, and millions more unemployed, will reduce the demand for gasoline in the USA. As soon as the government money give away stops, and it will after the November election, the economy will begin to shrink from lack of demand. That will reduce the demand for fuel some more, as will less globalization. Another Great Depression can't be ruled out, since debt is at record high levels which is bad for growth.
  • Bob Forbes on July 14 2020 said:
    Except that even more oil will be needed at the power station to charge the expensive inefficient short range electric toy cars since renewable energy costs more to maintain than it actually produces, is unstable, inefficient, unreliable most of the time and only can contribute a microscopic amount of energy. Did they tell you about the millions of tons of toxic waste from spent batteries destined for landfill one day when they expire or the forced child labour used to mine and extract the rare earth metals being used in permanent magnet motors and generators. Let’s not mention the millions of acres of land being swallowed up by solar or wind farms displacing wildlife from their homes, land which could have been farmed for much needed food or the massive carbon footprint created by burning of marine diesel by the ships engines and generators or the being used to transport the components and parts all over the world for these eyesores. While a green politician smiles and his daughter plays with her dolls, somewhere on the other side of the world a child cries in fear and robbed of its childhood knowing he or she will wake up to a 15 hour day of hard labour down a hot unventilated mine with no PPE using polluting diesel driven tools. How dare they rob that child of its childhood. How dare they. Oil is here to stay, the evil truth behind renewables will be heard one day.
  • Bob Forbes on July 14 2020 said:
    That’s correct, nobody will be using oil. Everything will be made from wood and stone, we will hunt and scavenge for our food, and live exactly they way humans lived before oil. Freeze to death and have a very short lifespan. Oh and the computer you typed that comment on won’t exist either. Smoke signals, yodelling and feather capped boys carrying scrolled messages on horses was how they communicated back then.
  • James Fraley on July 14 2020 said:
    The price will hit 200.00 after the fake pandemic. Now they caused a even bigger problem. I don't think they have a clue what their doing to the economy. Big rebound on the way.
  • Amit Raina on July 15 2020 said:
    The old rule of forecasting was to make as many forecasts as possible and publicise the ones you got right. The new rule is to forecast so far in the future, no one will know you got it wrong.
  • Tony Colioni on July 15 2020 said:
    We are 5 to 8 real years away from the average person buying into all electric..Oil will still survive. With any shortage or disruptions we could see the 100 to 150 dollar per barrel. With a war this is game changer.
  • Jimmy Witts on July 18 2020 said:
    For people that keep promoting EV as the end of oil, you are all wrong. The energy consumption is moving from the tail pipe to the electric station stack. Population growth will drive the consumption of petrochemicals. Due lack of investment in the O&G industry will drive prices over $100 in the near future. Watch and learn you folks that believe the fossil fuels are over but you use it every day. Just a bunch of hypocrites.

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