Marcel Salikhov, President of the Institute for Energy and Finance Foundation, commented to the information portal IZ.RU on the oil prices dynamics.
“Since the beginning of the year, there has been a strong growth in oil demand in many large countries against the backdrop of a recovery in economic activity and the lifting of quarantine restrictions,”- Marcel Salikhov, President of the Institute for Energy and Finance, said. - Moreover, as predicted, the pandemic could increase the demand for petroleum products. Due to closed borders and increased airfare, citizens in both the EU and Russia have begun to use personal transport more actively for long-distance travel on vacation. This creates additional demand for gasoline. For example, road traffic in the EU has already recovered to pre-pandemic levels and is likely to exceed it in the summer”.
However, supply growth remains limited. OPEC + has begun to increase production, but this is more of a compensation. Oil production in the United States remained stable in early 2021 - about 11 million barrels per day, according to the Energy Information Administration. All this created conditions for a steady rise in oil prices. Most likely, similar dynamics (strong growth in demand with limited growth in supply) will continue, and this will lead to further price increases, Salikhov sums up.
According to him, for the rise in prices to $ 100 per barrel, most likely, some additional factors will be required - for example, new sanctions against Iran or a surge in tensions in the Middle East. However, it is possible.
Even if prices reach such indicators, they will not be sustainable in the long term, Marcel Salikhov is convinced.
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