International crude oil prices will remain high for a while, according to Patrick Pouyanné, chief executive of French supermajor TotalEnergies.
"I've no good news to deliver, oil prices will remain high," Pouyanné told RTL France radio, commenting on the recent rally in oil prices and the higher energy, power, and gas prices, especially in Europe.
Continuously growing global oil demand amid muted new investment in production will keep oil prices elevated, according to the CEO of one of the largest oil and gas producing companies in the world.
Speaking to RTL France, Pouyanné announced that as of February 14, TotalEnergies will hand out "gas vouchers" worth $114 (100 euros) to lower-income customers in France to help them with soaring energy bills.
The higher oil prices, currently at $90 a barrel, have added to the energy crisis in Europe, which has seen gas and electricity prices—and customer bills—surge in recent months.
Pouyanné's view that oil prices will remain high is shared by a large number of other industry executives, as well as analysts.
Oil prices have further room to rise in the coming months, some of them say.
Robust oil demand and the headroom for money managers to expand their long positions in the crude complex, combined with shrinking global spare production capacity and "worrisome" inventory levels, could push oil prices even higher, the world's largest independent oil trader, Vitol Group, says.
$100 oil is in the cards this year, and it could be reached as soon as the second quarter, according to Bank of America.
Tighter market balances, coupled with shrinking spare production capacity, have made a growing number of investment banks more bullish on oil. Major Wall Street banks, including Goldman Sachs, Bank of America, JP Morgan, and Morgan Stanley, expect prices to hit $100 a barrel as soon as this year.
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By Tsvetana Paraskova for Oilprice.com
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I thought that he must be thrilled to bits by the rising crude oil prices. After all high prices are the very one factor if not the only one earning his company billions of dollars.
Still TotalEnergies is showing a charitable side to it by handing out gas vouchers worth $114 (100 euros) to lower-income customers in France to help them with soaring energy bills.
The global oil market is already in a super-cycle phase that could last ten years and could take Brent crude to $120 a barrel in the next few years. In fact, high oil prices are here to stay well into the future underpinned by both a world population projected to rise from 7.9 billion currently to 9.7 billion by 2050 and a global economy projected to grow from $91 trillion now to $245 trillion by 2050.
Therefore, notions of a post-oil era and a peak oil demand are mere illusions.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London