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 top energy trader, Vitol Group, told Bloomberg Television on Monday.
“The prospect of higher prices in the second half of the year, in the sort of $90-$100 range, is a real possibility”. This is what Hardy told Bloomberg in an interview.
According to Hardy, global oil demand will rise by 2.2 million barrels per day (BPD) in 2023. This is in comparison to 2022 and will reach a record level. It was driven by a jump in diesel, naphtha, and liquid petroleum gas (LPG) demand.
“You don’t have much room on the supply side is the reality. So the potential for a rally is certainly there”. Hardy told Bloomberg.
The Peak Oil Demand
Peak oil demand is expected to come around the end of this decade. This is amid rapid decarbonization, 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. Meanwhile, 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. It will 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. This is unless a major geopolitical event rattles markets again. This is what 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.
Source: Oil Price
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