Oil could vault as high as $150 a barrel

Oil could vault as high as $150 a barrel

Via CNBC.com:

Oil prices are soaring and nothing appears to be stopping their ascent. December to January saw international benchmark Brent crude climb by roughly $11 a barrel, and it’s gone up nearly the same amount since the start of February, underpinned by supply concerns, rising inflation and geopolitical tensions.

Brent surpassing $100 a barrel is almost a given at this point, energy analysts say; but now, an increasing number of forecasters predict the commodity surpassing $125 a barrel and even higher. 

″Given that you’ve got this underinvestment in capital exploration, we’re running low on physical oil, we’re running short of supply,” John Driscoll, director of JTD Energy Services, told CNBC on Monday. “There is a scenario where we could vault past $120, even as high as $150” a barrel. 

Brent crude crossed $95 a barrel in the last week, its highest level since the summer of 2014 and a 63% increase year-on-year. It was trading at $93.98 per barrel on Wednesday at 10:20 a.m. in London. 

Tensions over the threat of a Russian invasion into Ukraine have also helped to push prices up, though a partial drawdown of Russian troops from Ukraine’s border areas on Tuesday led the commodity’s price to retreat about 3% from the previous day. While Moscow has rejected the assumption of an impending invasion, NATO leaders and U.S. President Joe Biden insist that the risk of war remains high. 

But it’s “not only the geopolitical tailwinds that we’re picking up, but the fundamentals,” Driscoll said. 

Oil prices are soaring and nothing appears to be stopping their ascent. December to January saw international benchmark Brent crude climb by roughly $11 a barrel, and it’s gone up nearly the same amount since the start of February, underpinned by supply concerns, rising inflation and geopolitical tensions.

Brent surpassing $100 a barrel is almost a given at this point, energy analysts say; but now, an increasing number of forecasters predict the commodity surpassing $125 a barrel and even higher. 

″Given that you’ve got this underinvestment in capital exploration, we’re running low on physical oil, we’re running short of supply,” John Driscoll, director of JTD Energy Services, told CNBC on Monday. “There is a scenario where we could vault past $120, even as high as $150” a barrel. 

Brent crude crossed $95 a barrel in the last week, its highest level since the summer of 2014 and a 63% increase year-on-year. It was trading at $93.98 per barrel on Wednesday at 10:20 a.m. in London. 

Tensions over the threat of a Russian invasion into Ukraine have also helped to push prices up, though a partial drawdown of Russian troops from Ukraine’s border areas on Tuesday led the commodity’s price to retreat about 3% from the previous day. While Moscow has rejected the assumption of an impending invasion, NATO leaders and U.S. President Joe Biden insist that the risk of war remains high. 

But it’s “not only the geopolitical tailwinds that we’re picking up, but the fundamentals,” Driscoll said. 

Read the rest here