Oil rose on Friday, surpassing this week’s high to hit a new 13-month high.
West Texas Intermediate Crude Oil hit $ 59.82 a barrel on Friday, its highest level since January 2020, a promising sign as the industry struggled with depressed demand during the coronavirus pandemic.
However, after rallying 23% this year, a top energy expert warns that the commodity may have surpassed itself.
“My personal opinion … is that the price is too frothy and does not warrant a WTI price of more than 58 US dollars,” Regina Mayor, global and US chief energy officer at KPMG, told CNBC’s “Trading Nation” on Thursday “.
However, the mayor sees positive signs that market conditions are supporting higher prices than last year’s lows. Lower demand and fears of longer lockdowns had made a crude oil futures contract negative for the first time in history in April 2020.
“The supply is declining. … We are all surprised at how quickly it takes to mine these stocks and get closer to the 5-year moving average,” said the mayor of the reasons for higher oil prices. “Were [also] In China and India, real life demand has improved, although I’m warning that the number in China is a January 2020 pandemic comparison versus January 2021, and then there are expectations that demand will come with vaccinations and more people on the move , will rise. “
These factors help West Texas Intermiate’s crude oil trade in the low 50s and no closer to $ 60, the mayor said. She noted that any price above $ 30 for WTI would be profitable for producers.
US inventory levels fell last week to their lowest level in eleven months. Meanwhile, OPEC capped its supply in February and Saudi Arabia will cut its production by 1 million barrels a day over the next few months.
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