Some of the world's biggest oil traders expect oil prices to exceed $200 per barrel by the end of the year, the Financial Times reported, citing opinions shared at its Commodity Global Summit this week.
"Wakey, wakey. We are not going back to normal business in a few months," said Pierre Andurand, who has been super bullish on oil for a while. "I think we're losing the Russian supply on the European side forever."
The hedge fund manager first made his $200-per-barrel forecast earlier this month, saying that producers ranging from African members of OPEC+ to the U.S. shale patch will struggle to replace the Russian crude going off the market.
Yet Andurand is neither the only superbull nor the biggest one. Doug King, the chairman of RCMA Group, told the FT that crude oil could top $200 and reach $250 by the end of the year.
"This is not transitory. This is going to be a crude supply shock," King told the FT summit.
Earlier this month, there were forecasts that Brent crude would hit $200 by April, but that seems to have been a reaction to the U.S. ban on Russian oil and fuel imports. Now that initial shock has subsided-and so have prices slipped from the heights reached following the ban. However, the upside potential remains considerable as analysts see some 3 million barrels daily of Russian oil going off the market.
The problem is that these barrels cannot be replaced either easily or swiftly, according to the trading industry.
"I don't think given the way things are going, this is a temporary problem," Alok Sinha, head of oil and gas at Standard Chartered told the FT summit. "You now have to deal with this as a long term issue which means you need to find alternative supply growth."
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
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