According to oil strategist Helima Croft of RBC Capital Markets, we should expect higher prices at the pump in the coming months. That writes Finanzen.nl.
Croft has reiterated her optimistic prediction about oil. Croft expects the oil price to climb above $60 a barrel in the coming months, CNBC reported. That is an increase of almost 20 percent from the current price level.
The RBC strategist expects, among other things, that high US oil inventories, which have depressed prices in recent times, will decrease. Also, the summer season, in which many Americans take the car, will drive the price up and the demand for oil will not decrease for the time being.
On Friday, the price of oil rose 1 percent in response to the US missile strikes in Syria to USD 52,24 a barrel. That was the highest closing price in a month.
Little impact US missile attack in Syria
Croft does not expect recent developments in the Middle East to push the oil price further. This is because there is no imminent threat of supply disruption, as most of the local production has already ceased since the outbreak of the civil war in Syria.
Impact with further escalation
Croft does foresee an impact on oil prices as the situation further escalates, sparking new tensions between Russia and the Gulf Cooperation Council oil countries, and as the US strikes give additional support to anti-Western presidential candidates in Iran's May elections.
Unless the missile strikes are followed by a serious attempt to oust Syrian leader Bashar Assad, none of these scenarios will materialize and the impact on oil prices will remain negligible. But given President Trump's previous distaste for humanitarian interventions and military actions in the Middle East, we are now in uncharted waters," Croft said.
OPEC meeting
In the short term, OPEC is playing a bigger role in oil price direction, according to the oil strategist and she expects the OPEC meeting on May 25 to have more impact.
"We expect OPEC to extend the agreed production cut of 1,8 million barrels per day by six months, because oil leaders mainly fear a drop in oil prices to levels of 30 to 40 dollars a barrel."
Also read:
'Unilever chooses banks for margarine deal'
These Dutch entrepreneurs still need €30 million for their flying windmill
This 43-year-old newcomer convinced Jumbo to put his 'healthy' ice cream on the shelf
© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.
