Oil at $300 a barrel? Not impossible, says this hedge fund manager; here’s why

By: |
Updated: April 30, 2018 2:16:09 PM

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; but this hedge fund manager believes that oil at $300 a barrel is not "impossible".

Oil at 0 a barrel? Not impossible, says this hedge fund manager; here's whyIf oil prices do not rise fast enough, 0 oil in a few years is not impossible. (Image: Reuters)

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.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

FinancialExpress_1x1_Imp_Desktop