Whispers of $80 Oil Are Growing Louder

11 Jan 2018   Prices

On Wednesday, U.S. crude futures rose 0.97% to $63.57 a barrel and Brent, the global benchmark, was up 0.55% at $69.20 a barrel. Byron Wien, vice chairman of the Private Wealth Solutions group at Blackstone, put $80 West Texas Intermediate on his annual list of 10 surprises in store for markets this year. “Demand is going to continue to increase faster than supply,” he said in an interview. “It’s out of consensus, but people are underestimating the expanding middle class in the developing world and their resultant demand.” Shrinking inventories, commitment by the Organization of the Petroleum Exporting Countries to cut output through the year, and only modest production growth from outside the group could all also push prices higher, he said. Production cuts by OPEC and other major producers and unexpectedly strong demand were a potent mix last year, helping pull prices out of a three year downturn. […]

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