Increasing demand worldwide Oil price close to $ 100?
Status: 23.06.2021 3:10 p.m.
Oil is more expensive than it has been in two years. Experts warn of a supply crisis: The prices for crude oil and thus also gasoline, kerosene and heating oil could soon rise much higher.
From Angela Göpfert, tagesschau.de
Oil prices hit new multi-year highs this week. For the first time in two years, a barrel (159 liters) of the North Sea Brent cost more than $ 75 again. For a barrel of the US West Texas Intermediate (WTI) variety, more than 73 dollars were paid on the market – the highest amount since October 2018. Rising oil prices – something that businesses and consumers may need to get used to. According to some experts, the new multi-year highs in oil prices, which many consumers are already feeling painfully at gas stations or when buying heating oil, are just the beginning of a longer upward trend in the oil market.
Analysts predict rising oil prices
The experts at the US investment bank Goldman Sachs expect the Brent price to rise to $ 80 this summer. But that is not the end of the story. An oil price of $ 100 is a “real possibility”. Alex Sanna, top oil trader at Glencore, the world’s largest commodity trading group, also said, according to the Financial Times, that an oil price of $ 100 is becoming increasingly likely.
Price increase at Pentecost How expensive will fuel be in the long run?
Before long weekends, the prices at the petrol stations usually rise significantly.
The experts at JPMorgan even see a new oil super cycle looming and recently renewed their forecast of an oil price of $ 190 in 2025.
Demand congestion as a price driver
Francisco Blanch, raw materials expert at Bank of America, may not look quite that far into the future. For this he has the most precise 100-dollar forecast ready: the oil price could crack the round mark as early as 2022. The market hardly changes on the supply side – and this in turn is offset by an immense backlog of demand. It is easy to explain where this backlog of demand comes from: Just as many private households restricted their consumption during the pandemic, so too many companies put the necessary investments aside. Now that the global vaccination campaign is gaining momentum, at least in the major industrialized countries, consumers, companies and economies have a lot to catch up on.
Delta variant is a risk factor
The more relaxed Corona situation and the awakening global economy are leading to higher demand for crude oil, gasoline, diesel – and kerosene. Oil expert Blanch sees the rising travel industry as a major price driver.
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The delta variant of the virus from India, which could lead to a further tightening of the corona measures, is currently also posing a risk to the economy.
Signal of a shortage of supply
In search of signs of whether demand is actually exceeding supply at the moment, it is worth taking a look at the market for so-called oil futures. Current oil futures contracts are quoted there higher than contracts with delivery at a later point in time. Such a constellation, referred to by experts as “backwardation”, is rather unusual and a clear indication of fear of scarcity – “and thus for further rising prices”, as market expert Robert Rethfeld from Wellenreiter-Invest emphasizes.
Clarification from Brinkhaus Petrol is also becoming more expensive with the Union
When it comes to the issue of gasoline prices, the focus is on the Greens. The grand coalition decided on an increase long ago.
A price corrective called fracking
The rising prices should actually make re-entry into the oil market attractive for the US shale industry. In the past, the US frackers acted as flexible price correctors on the oil market: If prices rose, more shale oil was drilled in the short term, supply increased, prices fell again.
As a reminder, the last time oil traded above $ 100 was in 2014, when a rapidly growing supply from the US fracking industry brought an abrupt end to the last oil super cycle.
Fuel price at gas stations Daily fluctuation of twelve cents
Gas stations vary greatly in fuel prices over the course of a day – with up to six peaks a day.
Sustainability trend slows US oil industry
But this mechanism doesn’t seem to work that well anymore. This is due on the one hand to the new US President Joe Biden, who imposed a stop on oil and gas drilling on state-owned land in January, and on the other hand to the global trend towards sustainable investment.
“The number of active US oil wells is increasing only slowly,” emphasizes wave rider expert Rethfeld. “The investors do not want to see an expansion of the production capacities at the moment, but instead demand investments in renewable energies.”
Iran as a risk factor
The production countries of the OPEC + oil cartel, especially Saudi Arabia and Russia, could benefit from the West’s climate policy. It remains to be seen how willing they are to expand production to fill the void left by the US oil industry.
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Especially since there are supply risks on the part of OPEC: “After the election of an ultra-conservative cleric as the new president, Iran will have a hard time overturning US sanctions and increasing oil exports,” said Eugen Weinberg, raw materials expert at Commerzbank .
Inflation Risks Before Revaluation?
Should the oil price actually rise further towards 100 dollars, this would inevitably lead to a reassessment of the inflation risks in the financial markets, since the oil price is one of the main drivers of consumer prices.
June 23, 2021
Rising US prices Fed chief is dampening Inflation concerns
Fed Chairman Powell expects the cyclical inflation effects in the US to fade soon.
Just yesterday, Jerome Powell, head of the US Federal Reserve (Fed), told the House of Representatives budget committee again that the Fed was considering the current high inflation rates a temporary phenomenon considered. However, market expert Rethfeld emphasizes: “Any oil price above $ 100 would suggest to the public that Powell is wrong.”
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