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Total CEO says oil price could hit US$100 'in coming months'

18 May 2018

The worldwide benchmark broke through $80 for the first time since November 2014 on Thursday. As a result of se increases gasoline and diesel have exceeded price barrier of 1.3 and 1.2 euros per liter, which implies new Maxima.

Toward 0950 GMT, a barrel of North Sea Brent briefly passed US$80 for the first time since November 2014.

Asia's demand is at record highs and with rising prices its crude could cost US$1 trillion this year, about twice what it paid during the market lull of 2015/2016. Thus, this Thursday has reached 72.30 dollars per barrel, its maximum amount since November 2017.

The crude oil price forward curve is in firm backwardation, a structure that suggests a tight market as prices for immediate delivery are higher than those for later dispatch. OPEC is already seen as a possible source for plugging any possible gap left behind by Iran, with enough spare production capacity along with Russian Federation to more than easily offset any cut back in Iran's production levels. Thus, fear of investors to reduce supply drives amount upward.

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Allied's George Lazaridis, Head of Research & Valuations noted that "a bigger key to all this however, will be the turbulence all this will bring on the price of crude oil itself".

British bank Barclays said it expected average prices of $70 per barrel for Brent this year and $65 a barrel for 2019, up from estimates of $63 and $60 previously. For its part, Diesel has marked a new annual maximum and levels that were not seen since December 2014 to be in 1.207 euros, a rise of 1.42%, according to data from European Union oil bulletin.

A common view that is often expressed amongst practitioners, is that high oil prices foretell a market rally in general.

Chinese firms will also be careful not compromise activity in the USA or other western countries, he said, noting that CNPC has several American trade partners.

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US West Texas Intermediate crude for June was changing hands at around $71 in early NY trade, virtually unchanged from the previous week's level.

Although Iranian oil exports have recovered from Western sanctions that preceded the deal to restrict its nuclear development, exports from Venezuela have plummeted. The EIA reported that US crude oil imports averaged 7.6 million barrels per day last week, up by 278 thousand barrels per day from the previous week. "So I wouldn't be surprised to see US$100 per barrel in the coming months".

US crude inventories (USOILC=ECI) fell by 1.4 million barrels in the week to May 11, compared with analyst expectations for a 763,000 barrel decrease.

"Global oil demand growth for 2018 has been revised slightly downwards from 1.5 million barrels per day", the IEA said int latest oil supply report. Washington dropped out of that pact last week, sending oil sharply higher on the belief that Iranian supply will be curbed, when crude inventories are already falling.

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Total CEO says oil price could hit US$100 'in coming months'