Crude oil price could skyrocket to $150 a barrel when the world economy fully reopened, according to Christopher Wood, the Head of Equity Strategy at Jefferies, an American multinational independent investment bank and financial services company headquartered in New York City.
Brent crude oil, against which Nigerian oil is priced, plunged to $67.46 a barrel on Tuesday amid the uncertainty surrounding the Omicron Covid variant. However, it pared losses on Wednesday, rebounding to $70.94 a barrel as of 3:03 pm Nigerian time.
In spite of about 21 percent decline in the value of the commodity in the last three trading sessions, Wood believed the commodity could rise to as much as $150 per barrel once the world economy fully reopened despite campaigns to halt the use of fossil fuel and embrace more environmentally friendly energy.
Explaining the modalities for his position, he said crude oil rose to over $80 a barrel with the partial reopening of the global economy, this he said was largely due to high demand for fossil fuels even without the usual investment incentives in the sector.
“Oil got to over $80 with a lot of Asia closed,” and China’s borders are effectively still closed, he said, in reference of Beijing’s strict zero-Covid approach. “In a really fully reopened world, the oil price could go to a $150 dollars because the supply constraints are dramatic.”
He claimed the political attack on fossil fuels in recent years was the reason incentive for investment in the sector dropped in spite of its lingering importance, adding that 84 percent of the world’s energy in 2020 was met by fossil fuels.
According to him, because nobody is really investing in fossil energy, supply constraints will continue to support prices, which could hit $150 a barrel.
“The issue for me is not the oil price, the issue is the pandemic. The oil price is gonna go higher in a fully reopened world because nobody’s investing in oil but the world still consumes fossil fuels,” he said.
“So oil can go much higher and that can definitely escalate an inflation scare,” Wood said.