One of the hot bets in commodities markets is that crude oil will jump in price, from about $70 a barrel, where it sits today, to $100. We haven’t seen triple digits in the U.S. price benchmark known as West Texas Intermediate since 2014, but as economies thaw out, energy use will rise.
In North America and Western Europe, around 4 out of 10 people have now received at least one COVID-19 vaccine dose. “All of these have contributed to more mobility, and more movement,” said consultant Sara Vakhshouri at SVB Energy International.
Many of us still work from home, but Vakhshouri said driving is surging. “If you can travel by, let’s say, metro or train, you might prefer to travel in your own personal car because you feel it’s safer,” she said.
More and more traders are banking on oil hitting $100 a barrel. Prices will keep going up if demand outraces world supply. Many drillers in the U.S. are financially strapped, so the question is whether OPEC and Russia can keep up — or, whether they want to keep oil scarce, said Steven Kopits at Princeton Energy Advisors.
“It comes down a little bit to the mood of the Saudis and a few other countries, and whether they want to sit back and let prices rise, or whether they want to add oil and get back to their normal production levels,” Kopits said.
For now, OPEC and Russia are gradually boosting production.