Oil Heading for $60-$65
By Charles Kennedy of Oilprice.com
The UAE’s economy minister sees oil jumping to $60 per barrel in the next few months.
"It’s possible for oil prices to reach $60 or more during this summer,” UAE economy minister Sultan Bin Saeed Al Mansoori said at a conference in Abu Dhabi on May 30.
There is a growing chorus of oil market watchers that see the oil price rally continuing, after rallying more than 80 percent over the past several months. According to Bloomberg, the global chief economist at Standard Chartered Plc says WTI and Brent will rise above $60 before the end of the year, and SEB Bank agreed that the markets would see oil prices above $60 in 2016.
Those voices come two weeks after investment bank Goldman Sachs, a notorious bear when it comes to oil prices, suddenly become a lot more bullish on crude. "The oil market has gone from nearing storage saturation to being in deficit much earlier than we expected," Goldman concluded earlier this month. That statement came not too long after Goldman had warned that record high oil storage levels around the world threatened to push crude prices down into the $20s again.
Now, sentiment is trending up along with prices. Global demand continues to rise, and summer driving season in the U.S. could add a bit more strength on the demand side. The IEA has already predicted that the global surplus shrinks to just 0.2 million barrels per day in the second half of the year, but as the surprise outages in Canada and Nigeria make clear, unexpected events could tighten markets further.
Still, the markets are not without headwinds. Suncor Energy is bringing some oil production back online in Alberta this week as the threat of wildfires recedes. Also, Iraq raised its export quota ahead of the OPEC meeting, signaling its intent to step up exports.
Nevertheless, global demand continues to rise while producers face disruptions and natural depletion. That points to higher oil prices.
"I think the secular trend is higher. We have been saying this for a few months. The damage we are doing to the non-OPEC supplies is just tremendous at this point in time. Non-OPEC supplies are down about 1 million barrels per day…So yes, we can get a bit of a correction in the near-term. Net-length is very high in the market. But the secular trend is definitely up," Amrita Sen, cofounder and chief oil analyst at Energy Aspects, told CNBC in a May 27 interview.
By Charles Kennedy of Oilprice.com
Also See:
OPEC Head Calls for $65 Oil
http://oilprice.com/Energy/Oil-Prices/OPEC-Head-Calls-for-65-Oil.html
Views: 2097
Replies to This Discussion
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Permalink Reply by jscottrx on -
there was so much "it hurts it hurts" by everybody. i mean everybody for whatever reason was in pain during the weeks leading up to the $20 handle low. thus NObody wants a repeat of that. strange it was. this will provide a much needed "tailwind" for "natural gas. cheap. plentiful. homegrown. clean. natural. gas." lol.
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Permalink Reply by Franks on
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Hi J,
I've still got the sense that Saudi Arabia will be thrown to the wolves due to 911. Even more strange is an article last month titled "Saudi Arabia planning for the end of oil age by creating a two trillion dollar investment fund".
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Permalink Reply by P.G. on
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Heard them talking on the news that the eye is on the rig count..
As it goes up, prices will come down.
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Permalink Reply by jscottrx on
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Norway agreed that by 2025, no more oil. no more gasoline auto's. the whole planet will no longer be using gasoline by 2030. Just then exactly what ARE they gonna be usin? bicycles? horses? teleportation?
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Americans consume petroleum products at a rate of three-and-a-half gallons of oil and more than 250 cubic feet of natural gas per day each! But, as shown here petroleum is not just used for fuel. A partial list of products made from Petroleum (144 of 6000 items)
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Permalink Reply by P.G. on
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Going to be a real challenge getting their walmart stores stocked over there without fuel..huh?
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Permalink Reply by Skip Peel - Mineral Consultant on -
~25% of the country's light duty vehicles are electric now. So 2025 isn't much of a stretch. Since they haven't had any problems stocking their stores to date, I doubt they will have any problems in the future.
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Permalink Reply by P.G. on
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What do you mean..light duty?
Maybe local bread trucks but what about all those semi tractors?How about Trash compactor vehicles?
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Liquefied natural gas... and Japan developing a tiny gas generator to auto-charge auto batteries while on the run.
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Permalink Reply by P.G. on
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I saw where Germany has come up with an all electric 18 wheeler truck. But it only gets 62 miles to a charge. Which they said takes 4 hours to charge.
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Permalink Reply by Skip Peel - Mineral Consultant on
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Heavy duty vehicles that return to a central location each day can run on CNG. Here in Shreveport we have city buses and garbage trucks that are CNG fueled. Long haul heavy duty vehicles will use LNG, not CNG.
The range of electric vehicles is increasing on a regular bases as is the battery technology.
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Permalink Reply by Spring Branch,mineral owner on
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Where is the increased supply of electricity to meet the demand going to come from? How much extra electricity does it take to charge that 18 wheeler battery in order to travel that 62 miles?
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