Brent Price Forecast: Will Crude Prices Hit $100 a Barrel?

Brent crude prices could rise to $90-$100 a barrel by the end of the year due to a travel boom in China that has fueled demand for jet fuel and gasoline, said oil market analyst Gary Ross of Black Gold Investors. Bloomberg has reported on these developments.

How does China’s travel boom impact Brent price forecast of $100?

Domestic flights in China this year have already reached 110% of pre-pandemic levels. International ones have recovered by 75%, Ross notes. “We can expect an increase in demand for jet fuel in the region of 500,000 barrels per day in China alone,” the expert predicts.

In addition, he said, many Chinese residents go on long trips in cars with internal combustion engines, and the number of such trips may further increase. “Gasoline sales in China during the summer were absolutely stunning,” Ross said. “People are driving like crazy.”

Despite the growing popularity of electric cars, people mainly choose cars with internal combustion engines for long trips, the expert notes. Ross believes that gasoline demand in China has not yet reached its peak, and we can expect dramatic growth year on year.

Increase in oil prices is also influenced by production restrictions

The rise in oil prices is also driven by production restrictions imposed by Saudi Arabia, Russia and other exporters participating in the OPEC+ deal. Thanks to them, Brent prices have increased by almost a quarter since the end of June. At 15:37 GMT on September 4, Brent futures for delivery in November were trading at $88.54 per barrel.

In June, Russia, Saudi Arabia and other OPEC+ member countries agreed to extend restrictions on oil production until 2024: the total production level of OPEC+ countries will be 40.46 million barrels per day, 1.4 million barrels less than now. Unilaterally, Saudi Arabia announced it would voluntarily cut production by another 1 million barrels per day in July to stabilize the market. The kingdom later extended production cuts, most recently to September.

Russia has decided to limit oil exports by 500,000 barrels per day from August 1. Later, Deputy Prime Minister Alexander Novak announced plans to reduce oil supplies in September by 300,000 barrels per day to June levels. Last week, Novak reported that Russia and other OPEC+ countries had reached new agreements to reduce supplies, but he promised to reveal the details later.