Brent crude oil is at $74.14 a barrel today. In the last few days, the rallying crude oil price has got many world leaders worried — from India Prime Minister Narendra Modi to US President Donald Trump. The oil price has surged in last few months on the back of production cuts by OPEC and non-members countries led by Russia. Many analysts see oil surging to $100 a barrel in coming days but a hedge fund manager believes that it is not impossible for the price to hit $300 a barrel in few years.
Oil hedge fund manager Pierre Andurand believes that the reluctance of energy companies to invest in crude oil production could push oil price to $300 a barrel. “So paradoxically these peak demand fears might bring the largest supply shock ever. If oil prices do not rise fast enough, $300 oil in a few years is not impossible,” Bloomberg quoted Pierre Andurand as saying.
He explains that oil price at $100 a barrel may not be a bad development, and could “encourage enough investments outside of the US”. The Brent crude oil price began falling from its average yearly high of $111.63 a barrel mainly on the back of over-supply and subdued demand. Other geopolitical factors such as stronger US Dollar and Iran-US Nuclear deal also contributed to the low oil price windfall, which lasted three years.
On one hand, countries such as the US and Canada increased their efforts to produce oil; on the other hand, oil demand slumped due to the economic slowdown post the financial crisis of 2008. Pierre Andurand says that oil at $100 a barrel “will not kill the economy”, and will, instead, encourage other countries to explore the production of crude oil than depending solely on current producers. Else, oil price $300 a barrel is not impossible, he warns.