The same analyst that predicted a fall from $100 oil to $25 in 2015 (and he nailed it) is now predicting $100 oil, possibly as soon as year-end 2018. Are the chickens coming home to roost? The math says yes. Increasing demand + capital reductions (not to mention Aramco IPO scheduled for late 2018 see “The King Sets His Own Ransom“) point to much higher oil prices in 2018.
The oil market has a problem — and it’s not a global glut. Rather, it’s that supply won’t meet rising demand in the long run, unless crude prices jump back to $100 a barrel.
That’s the message from one of the world’s best-known oil traders, Pierre Andurand, who in September 2015, forecast crude would slump to between $25 and $30 — five months before prices dipped to around $26. But now the trader, who runs a big hedge fund specializing in the black gold, called Andurand Capital, is striking a remarkably upbeat tone on the commodity. (See "Oil Bear Bets on Return to $25 a Barrel")
Demand growth has rarely been this strong, global oil reserves peaked 30 years ago, new oil discoveries are at all-time lows, and we think non-OPEC, ex-U.S., production is doomed at current prices,” he said at the Sohn Conference in London last week.
“So [production] is pretty much in terminal decline, and the question that everyone really wants to get an answer to is: Can U.S. shale really fill the gap? Another question is: Are current geopolitical risks priced in?” he said.
The answer to both questions is “no,” according to Andurand. (by Sara Sjolin, MarketWatch)