Energy Consultant, Dr Yussif Sulemana is predicting that oil prices on the global market are likely to hit 60 dollars per barrel in the first quarter of 2021.
Currently, Brent crude oil is selling for about 55.78 dollars per barrel increasing by a little over 4 dollars since the start of the year.
Dr Sulemana in an interview with Citi Business News elaborated on the likely causes of a potential increase in the price of crude on the global oil market.
“The OPEC plus member, Russia and OPEC de facto leader, Saudi Arabia seemly are now in agreement and this agreement started in the first quarter of 2020 that they are going to reduce up to 9.7 million barrels taken out from the global basket and that was significant. So that amount is still in place. OPEC reduction holding, vaccines in the horizon and the vibrancy of the Asian economies are the three things accountable for these bullish sentiments in the oil prices. The projections are that, if this holds, oil price is going to gravitate to the mid-50s, that is 55 and if it still holds that there is good understanding among the OPEC plus members, Saudi Arabi, Russia, and oil price moves up a little bit, we could have it hitting 60.”
He, however, indicated that some factors may impede the likely increase.
“The other component is US President Biden, likely to go to green energy. So going to green energy will have some impact on the world of Hydrocarbons. So if the investment is shifted to the world of green energy, which is likely to happen again, because this kind of energy movement is almost like leadership requirement. We just need leadership proclamation. So when Biden whole-heartedly says that he’s going to support green energy, the investment bankers are going to invest in it. Just like President Trump whole-heartedly supported fracking that resulted in investment banker embracing it and investing so much into it. That allowed the USA to become crude oil independently.”
The increase of oil prices on the global market reflected locally with petrol currently selling around GHS 5.1 per litre, an increase from the about GHS4.8 per litre late last year.
Due to the COVID-19 pandemic, Brent Crude fell to $22.58 a barrel in March 2020, its lowest level since November 2002.