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Magid Shenouda, the Deputy CEO of Mercuria, a leading commodity trading company, delivered a startling prediction on Wednesday. He suggested that oil prices could skyrocket to $100 per barrel if the situation in the Middle East continues to escalate.
Market Response: Volatility and Oil Price Actions Analyzed
Shenouda, who also holds the position of Mercuria’s global head of trading, expressed his perspective during an industry conference held in Fujairah, the United Arab Emirates. He noted, “I don’t think there are that many analysts that believed that it was going to go to $100, in a normal circumstance. I think the events that have happened recently, I think that puts a great cloud (over) where things could go, because the market is not pricing much of a conflict.”
He pointed out the current market response, stating, “Volatility went up but the price action was actually quite muted – $3 a barrel is not that significant – so the market is fading any real action. But there is a high probability that this could escalate, and if it does escalate, then I think we can see $100.”
Read More: China Saves Billions on Sanctioned Oil Imports – Record Analysis
Mercuria Opinions: Vitol Bahrain’s Kieran Gallagher Weighs In
Kieran Gallagher, the Managing Director of Vitol Bahrain, shared similar sentiments, saying, “The Q4 outlook on demand is quite healthy. So there’s an argument to say we’ll still be at a healthy price set. What we need to remember is the run from $85 to $95 happened quite quickly.”
Regarding the possibility of oil hitting $100, he remarked, “Fundamental reasons why we might hit $100, that’s questionable – I think we would need to see a geopolitical event to perhaps hit that. But the demand outlook is certainly healthy enough to keep us around the $90 price set.”
Challenges in the Oil Industry: Accessing Capital Amidst Inflation
Shenouda also raised concerns about the oil industry’s access to capital, stating, “I don’t think inflation is under control. There are people out there trying to raise capital at 20-plus percent. This is not sustainable. And those are oil producers.” He highlighted the example of Seacrest Petroleo’s $260 million IPO this year, noting that it “nearly failed.”
As tensions in the Middle East continue to evolve. The oil market remains on edge, with experts closely monitoring the situation for potential impacts on oil prices.
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