The world’s largest independent oil trader, Vitol Group, has said that it expects crude oil price to climb above $80 per barrel in the next couple of weeks.
This follows the expectation that the global crude oil demand will rise by an extra half a million barrels per day by winter due to global gas crisis which has led to rise in gas prices and driving a rush for other alternative sources of fuel.
This was made known by the Chief Executive Officer of Vitol, Russel Hardy, during an interview in London on Thursday, where he said that oil is most likely headed above $80 a barrel, partly as higher gas prices boost demand.
What the Vitol Chief Executive Officer is saying
Hardy said that this could force OPEC+ producers to add more supply into the market.
He said, “Can demand surprise us to the upside because of power switching? Yes,” Hardy said. “Is it likely that there’s half a million barrels a day of extra demand that comes through because of gas pricing? Probably our view is, that is likely across winter.
“All people are worried about is that we’re missing pieces of stock which we normally have,” he said. “During the winter, demand for gas is massively higher than demand for gas during the summer. You have to store, there’s no two ways around it.”
Hardy’s bullish sentiments echoes that of the Group Managing Director of NNPC, Mele Kyari, who predicted higher oil prices in the next 3 months and Goldman Sachs Group Inc., which is predicting higher crude oil prices, especially if the winter months are colder than normal.
In case you missed it
Recall that yesterday, the NNPC said that the supply crisis which has negatively affected the global natural gas market and has led to rising prices, could push up oil prices by as much as $10 a barrel, which is about $86 per barrel over the next 3 to 6 months.
The NNPC boss pointed out that the global gas crisis which has led to an increase in gas prices will make energy consumers seek fuel alternatives to natural gas in the nearest future which might see demand for oil rising by as much as 1 million barrels per day with attendant effect on crude oil prices
Traders have been assessing the likely impact of a tightening natural gas market on the broader energy complex over the coming winter.