Patience will be rewarded.... Oil likely to hit $100 pb16 Jun 2021 18:55
Todays SP will be a distant memory this time next year. The memory will be accompanied by thoughts of " I wish I bought more when the SP was 330p"
Respect and GLA
MarkGo
FT Article.
Oil likely to hit $100 a barrel, say top commodity traders
Executives point to a slowdown in investment in supplies before demand has peaked
Predictions that oil prices will move much higher in the next few years have gained momentum in recent weeks.
The world’s top commodity traders have forecast a return to $100-a-barrel oil, as investment in new supplies slows down before demand has peaked and before green alternatives can take up the slack.
Executives from Vitol, Glencore and Trafigura and Goldman Sachs said on Tuesday that $100 crude was a real possibility, with prices already reaching their highest level in two years this week as Brent crude moved above $73 a barrel.
The prediction comes at a time when concern about inflation is rising and many commodities, such as copper, have already reached record highs, boosted by supply shortfalls as the economic recovery gathers pace.
Oil has lagged behind because of a slowdown in demand during the coronavirus pandemic and fears demand could peak in the next decade. But predictions that prices will move much higher in the next few years have gained momentum in recent weeks.
Jeremy Weir, executive chair of Trafigura, one of the world’s largest independent oil traders, told the FT Commodities Global Summit on Tuesday that he was “concerned” by the lack of spending on new supply because the world was not ready to make the leap to clean energy and complete electrification.
“I actually think that there is a chance for oil to get up to those numbers,” he told the summit. “The issue for oil is not demand?.?.?.?the supply situation is quite concerning. We’ve gone from 15 years of reserves to 10 years. We’ve seen capital expenditure go from five years ago at $400bn a year to just $100bn a year. So therefore, there is a concern on the supply side?.?.?. that I think will probably drive prices higher.”
Alex Sanna, the top oil trader at Glencore, also said that $100 oil was looking more likely.
“If you’re cutting supply without at the same time addressing your demand that is when you can get price dislocations,” Sanna said. “You’re really only one or two events away from a material spike in oil
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