Uncategorized Price of oil could reach $100/barrel by late 2018 or early 2019

Price of oil could reach $100/barrel by late 2018 or early 2019

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Commodity merchants Trafigura and Mercuria have warned that the price of oil, currently at $69.85 per barrel, could go all the way up to $100 per barrel by the end of 2018 or the beginning of 2019. This is due to sanctions given by the United States against Iran, which will be felt during the latter part of the year.

Iran is the third biggest producer of oil in the Organization of the Petroleum Exporting Countries (OPEC).

Speaking at the Asia Pacific Petroleum Conference (APPEC) in Singapore, the president of commodity merchant Mercuria Energy Trading, Daniel Jaeggi, said that nearly two million barrels per day of crude could be removed from the market by the fourth quarter of 2018 due to these sanctions.

This could result in the price of oil rising to $100 per barrel.

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According to Mr. Jaeggi, ”We’re on the verge of some significant volatility in Q4 2018 because depending on the severity and duration of the Iranian sanctions, the market simply does not have an adequate supply response for a 2 million barrel a day disappearance of oil from the markets.”

Ben Luckock, the co-head of oil trading at Trafigura, a fellow merchant. echoed Mr. Jaeggi, sating that by Christmas the price of crude oil go up to $90 per barrel. By New Year, Mr. Luckok said, as markets tighten, the price could go as high as $100.

Even J.P. Morgan, a US investment bank, said that “a spike to $90 per barrel is likely” in the months to come.

Financial sanctions have already been implemented against Tehran by Washington. From November 4 onwards, the US intends to target the oil exports of Iran. This puts pressure on other nations to lessen crude imports from Iran as well.

The price of oil has been steadily going up since the early months of 2017. OPEC, along with other suppliers except for Russia, began to limit their output in order to raise crude values.

Crude prices have also been affected by unexpected disruptions in several countries, including Libya, Nigeria and Venezuela.

At the same time, the demand worldwide is reaching 100 million barrels per day for the first time in history.

OPEC, as well as other producers of oil, are now deliberating whether or not to increase their output by 500,000 barrels per day in order to counteract the lessened supply from Iran.

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