The founder of the PIRA Energy Group, Gary Ross, who predicted last year’s sharp fall in oil prices, believes that the price of oil will return to 100 dollars a barrel by 2020. Speaking about the reasons for why the oil prices have changed, Ross highlighted that the oil markets are not as overstocked as it seems. He also noted that the excess supply is not that high, since Saudi Arabia is extracting from open wells without touching new ones.
We agree with this point of view but suggest that the oil quotes will be back to previous levels before 2020. For the moment, oil prices have only a bearish factor: a rise in the Fed’s rates which is seen as unavoidable. As for Iranian oil, the grey market exports have been so high that their official participation on the market gives investors little to fear.