Will oil hit $100 pb by the end of the year?

Naturally some would benefit – and already are. But in the words of analysts at Petromax: “$100 a barrel Brent looks fine on a chart, but it looks problematic on a currency 0-adjusted chart and disastrous on a domestic-price chart.”

The pressure on prices is coming as a result of the US sanctions on Iran, and OPEC rejecting Trump’s calls to pump more. (Which was weird, I mean, he asked so nicely in that tweet where he said the “OPEC monopoly must get prices down now!” and then threatened them by saying if they didn’t “they would not be safe for very long without us.” And then for good measure: “We will remember.” Perhaps Trump forgets that he’s the one taking 2m bpd out of the system, and also that Venezuela is going through a horrific economic crisis with people barely able to eat, never mind pump extra oil.)

When OPEC met in Algiers, despite the gentle entreaty, they decided to look at how to split an increase agreed at the start of the summer, of around 1m bpd. However, doubts were cast at the time about exactly how much would be pumped additionally as a number of the group lacked the extra capacity to do so.

Iranian oil minister Bijan Zanganeh said this was the greatest insult, and the UAE have also come out saying that “oil prices are driven by markets, by supply and demand.” The Minister of State for Foreign Affairs Anwar Gargash added: “These are not things that can be manipulated by a decision here or there and god knows in the past OPEC had tried to lift prices by deliberation. It depends on inventories, and expectation for growth.”

Unfortunately, if prices continue in this vein, PetroMatrix warns growth in demand would be “annihilated”. It’s no better at Mitsubishi UFJ Financial Group which warned prices of $100 would be “potentially damaging (to) global economic growth and increase inflation.”

For consumers, it’s not great news. The RAC warns drivers could face record high prices of 142p/litre of petrol and 148p for diesel – an increase of over 10p on each at current prices. Watch what happens in the upcoming Budget folks.

This could also bring in a new era – as PetroMatrix commented: “That should result in an acceleration of the sales trend of alternative fuels vehicles.” However according to its recently published forecast, OPEC believes the significant increase in demand from airlines over the next five years will offset the arrival of green energy cars.

The Saudi Energy Minster Khalid Al-Falih says: “Our plan is to meet demand. The reason Saudi Arabia didn’t increase more is because all of our customers are receiving all of the barrels they want.” Yet it’s being widely said that, if Iran goes, the Kingdom would struggle to produce the extra 2.5 m bpd.

“The market does not have the supply response for a potential disappearance of 2 million barrels a day in the fourth quarter,” Mercuria Energy Group Ltd. co-founder Daniel Jaeggi said in a speech at the S&P Global Platts Asia Pacific Petroleum Conference, known as APPEC.

It’s more than a little ironic that the very thing President Trump wanted to avoid – price surges around the time of the mid-term elections, is wholly down to his own doing.