In April last year, at the height of the pandemic crisis that touched every corner of the globe, oil prices collapsed in a spectacular fashion as demand plummeted and supply continued apace, leaving suppliers in some cases without a place to store their excess crude oil. US oil prices plunged, falling below $0 to $-37.63 a barrel – the lowest level since NYMEX opened oil futures trading in 1983.
14 months later, oil’s price on international indices has rebounded to pre-pandemic levels, which closed today on the Brent index above $74, and some industry executives and traders see the commodity possibly climbing to $100 in the near-term, according to a report in Bloomberg.
The CEOs of Royal Dutch Shell Plc and TotalEnergies SE joined major commodity traders and banks in predicting that oil could go as high as $100 a barrel, Bloomberg reports, although they also said volatile markets could drive prices back down again.
According to the report, Exxon Mobil Corp. CEO Darren Woods said at the Qatar Economic Forum Tuesday that low investment is “going to exacerbate supply and demand tightness as the economies pick back up again, and then in time we’ll see supply pick up and rebalance…In the shorter term, probably, higher prices” are more likely.
Oil’s price was rescued from 2020 lows with collective, patient action from the Saudi-led OPEC+ group, which slashed production to allow the global glut to ease and match lower demand during the pandemic. Now that economies around the world are opening up again, demand is rising.
As the price continues to climb upward from 2020 lows, OPEC+ is now reportedly discussing a further easing of oil output cuts from August, Reuters reports, citing two OPEC+ sources said on Tuesday, while cautioning that no decision had been taken yet on the exact volume to bring back to the market.
According to Bloomberg, trading house Trafigura Group Bank of America Corp., and Goldman Sachs Group Inc. all said $100 oil is possible over the next year.
