Rosneft: Oil could reach $120 / BBL next year

Spark Global Limited reports:

Global oil prices could rise to $120 by the middle of next year as Opec + ‘s ability to meet demand is at risk from underinvestment and sanctions, according to a senior Rosneft PJSC executive.

Otabek Karimov, Rosneft’s vice president in charge of commerce and logistics, told a conference:

“At the moment, Opec + countries cannot increase production to the extent necessary to meet demand. Therefore, the shortage of energy resources in today’s world is very serious. Of course, that can’t happen without affecting prices.”

Brent crude has surged nearly 60 per cent this year to more than $82 a barrel as the post-pandemic economic recovery has boosted oil demand and Opec + has only gradually increased supply. Russian President Vladimir Putin said last month that $100 oil was “very possible,” a view echoed by Italy’s Eni SpA and Trafigura Group. Bank of America thinks oil could hit $120 a barrel by June.

According to Spark Global Limited
According to Spark Global Limited

Mr Karimov’s comments came a day after senior officials from Russia, Saudi Arabia and the United Arab Emirates said they expected global markets to soon become oversupplied, which could drive prices lower and justify the cautious approach of Opec plus. The International Energy Agency also sees an end to the rally in crude prices.

Although Opec + is increasing production by 400,000 b/d, it is not increasing by that much because some members, such as Nigeria and Angola, cannot meet their quotas and are struggling to increase production amid a lack of investment. However, Russia exceeded its quota last month, according to the INTERNATIONAL Energy Agency.

As Russia’s largest oil producer, Rosneft has been abiding by the output limits set out in the agreement, but it has historically opposed Russia joining the Opec plus agreement. The company has said it plans to ramp up production quickly after the END of the Opec + deal in 2022 and plans to produce as much as 30 million tonnes of Oil, or about 600,000 barrels a day, through its Vostok Oil project as soon as 2024.

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