We are again in the season of oil price unpredictability where oil prices easily rise and fall. This has made RIGZONE to ask experts whether oil will ever reach $100 per barrel.
Oil will hit $100 per barrel again, according to RoseAnne Franco, head of oil and gas at global risk consultancy Verisk Maplecroft.
“It’s a question of when and will it stay there … the level of geopolitical uncertainty we confront today is particularly volatile and precisely the type of conditions that could lead to an oil price shock,” Franco told Rigzone.
“That said, the uncertainty appears to cut both ways as global economic growth, which supports higher oil demand, is vulnerable to heightened geopolitical risk, which erodes it,” Franco added.
Fundamentals don’t appear to support such higher price levels this year, according to Franco. The Verisk Maplecroft representative stated however that “beyond 2020, an oil supply crunch due to the retrenchment in spending in the oil patch coupled with a perfect storm on the geopolitical end could easily trigger another price shock.”
Offering his view, Devin Geoghegan, Genscape’s global director of petroleum intelligence, told Rigzone that “unless electric cars become the unicorn of demand growth deceleration, $100 oil seems highly likely at some point during the next 10 years.” The Genscape director added however that there are “very real headwinds” to reaching that figure again.
“First, stagnant or declining demand could cause an abrupt shift lower in multi-year supply need expectations,” Geoghegan said.