Commodity trader Mercuria’s deputy CEO, Magid Shenouda, has suggested that oil prices could soar to $100 per barrel if the situation in the Middle East intensifies. Speaking at an industry conference in Fujairah, UAE, Shenouda cited recent events and market dynamics as potential factors that could lead to this surge, emphasizing that the market is not yet factoring in the possibility of increased conflict. While volatility has risen, actual price action has been relatively subdued, and he believes that a conflict escalation is a significant risk that could push prices to $100.
Kieran Gallagher, the Managing Director of Vitol Bahrain, expressed a similar view, highlighting a healthy demand outlook for Q4. He acknowledged the rapid price run-up from $85 to $95 and suggested that fundamental factors alone may not drive prices to $100. However, the healthy demand forecast could support prices around the $90 level.
Shenouda also discussed the challenges the oil industry faces in accessing capital, pointing out concerns about inflation and interest rates. He mentioned that some companies are attempting to secure capital at interest rates of 20% or more, which he deemed unsustainable. Shenouda cited the recent $260 million IPO of Seacrest Petroleo, which encountered difficulties, as an example of the capital constraints facing the industry.
