[Your shopping cart is empty


Are Oil Prices Heading To $64 or $200? Depends On Who You Ask

Brent Crude prices are set to retreat to $64 a barrel by the end of 2021, one of Japan’s leading banks says, while the energy minister of a Gulf oil producer warned that the International Energy Agency’s suggestion of no new investments in oil could push oil prices to $200 a barrel.
In a weekly research report on the oil market, Mitsubishi UFJ Financial Group (MUFG) said that it expects higher OPEC+ oil production, recovering U.S. shale output, and the potential return of Iranian oil to push Brent Crude prices from $75 a barrel in the second quarter of 2021 to $73 at the end of the third quarter and to $64 per barrel at the end of the fourth quarter.
For 2022, the bank expects Brent Crude to average $58 per barrel, as per the report carried by TradeArabia.
“[A]s we move towards autumn, we believe that we are on the cusp of a leg lower in oil prices. Key behind our bearish oil price narrative is our conviction that the focus will shift from demand – the profile of which is becoming increasingly normalised and close to pre-virus levels – to higher supply, stemming from (i) higher Opec+ production, (ii) the eventual return of Iranian barrels, and (iii) gradually rising US shale output,” MUFG said.
At the same time, Mohammed al-Rumhi, the minister of oil and gas of Oman, warned that if oil producers were to follow the IEA’s suggestion that no new investment would be needed in oil – ever – if the world wants to reach net-zero by 2050, oil prices could spike to levels such as $100 or $200 per barrel crude.
“Recommending that we should not invest in new oil… I think that’s extremely dangerous,” al-Rumhi said at a conference on energy transitions organized by the IEA and Oman.
“If we stop investing in fossil fuel industry abruptly there will be energy starvation and the price of energy will just shoot” up and “in the short term we could see a 100 or 200 per barrel scenario,” al-Rumhi said, as carried by AFP.
According to the Energy Information Administration’s (EIA) latest Short-Term Energy Outlook on Wednesday, Brent prices will remain near current levels for the rest of this year, averaging $71 per barrel in Q4. Next year, Brent is set to drop to an annual average of $66 a barrel, on the back of rising production from OPEC+, U.S. shale, and other non-OPEC countries.  
By Tsvetana Paraskova for Oilprice.com
Sep 11, 2021 10:20
Number of visit : 193


Sender name is required
Email is required
Characters left: 500
Comment is required