In the second half of this year, oil prices could approach the $90-$100 per barrel area due to rising global demand and supply constraints. According to Vitol Group CEO Russell Hardy, the company is the largest independent oil trader in the world.
In an interview with Bloomberg, Hardy stated that “The prospect of higher prices in the second half of the year, in the sort of $90-$100 range, is a real possibility,”
Hardy predicts that the demand for diesel, naphtha, and liquefied petroleum gas (LPG) would increase by 2.2 million barrels per day (bpd) in 2023 compared to 2022 and reach a record level.
“You don’t have much room on the supply side in reality, so the potential for a rally is certainly there,” Hardy said to Bloomberg.
Peak oil consumption is anticipated to occur at the end of this decade amidst fast decarbonization, but investments in the oil supply will still be required, according to Vitol’s senior executive.
While some banks are skeptics that prices will reach triple digits in 2023, major U.S. shale operator Pioneer Natural Resources predicts that oil prices will reach $100 per barrel by the end of the year.
Brent Crude prices increased due to a big increase in Chinese demand and “will break $90 this summer and climb back up to $100 sometime in the second half of the year,” Scott Sheffield, the CEO of Pioneer, said earlier this month.
According to JPMorgan this month, Brent Crude prices won’t hit $100 per barrel until 2023 unless a significant geopolitical event rocks markets once more.
According to the Wall Street bank, Russian crude oil production is predicted to resume by June, but high prices would preclude the United States from repurchasing crude to replenish the Strategic Petroleum Reserve (SPR).
For its part, Goldman Sachs continues to predict that Brent Crude will reach $100 per barrel this year, but only in December, down from earlier projections of $100 oil as early as mid-2023.
Goldman Sachs reduced its average Brent pricing this year from $98 per barrel to $92 earlier this month. Goldman Sachs is one of the most positive Wall Street banks on crude oil and commodities in general, despite the reduction in oil price projections. Goldman is still of the opinion that a new supercycle is developing.
