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DUBAI: Global oil prices continued to soar on Wednesday as traders and analysts considered the prospect of crude oil peaking above $ 100 per barrel this year for the first time since 2014.

Brent traded above the $ 70 mark for the third day in a row, hitting a two-year high, while US standard West Texas International – in negative territory just over a year ago – also exceeded this level.

Traders are increasingly betting that crude can go up to $ 100 a barrel by the end of the year, with large amounts of speculative money in New York City and other malls buying contracts at this price.

Christian Malek, the analyst at giant US bank JP Morgan who first suggested an impending “supercycle” in crude prices, told Arab News that $ 100 a barrel by the end of the year was a possibility obvious.

“To reach $ 100 in 2021 would require a significant increase in demand in the second half of the year, but this scenario is certainly possible until we see a fourth wave of the COVID-19 virus,” he said.

Oil at this level would require an increase in demand to around 100 million barrels per day – the pre-COVID level – but Malek has not ruled out this as economic recovery has accelerated in most of the world’s major economies. such as the United States, China and Europe. .

Malek, who forecasted a sharp rise in oil prices in the future from lows due to the pandemic last spring, said oil production was in a “straightjacket” due to the financial and regulatory constraints in US industry, tight control of OPEC + production under Saudi leadership, and concerns about the ability of some OPEC + members to deliver more production.

“Saudi Arabia, the United Arab Emirates and Iraq probably have spare capacity, but many more are unlikely to have the capacity they think,” Malek said.

Many oil experts have warned of supply risks associated with sharp reductions in investment since pandemic price volatility, compounded by changing sentiment towards hydrocarbons in the United States and Europe.

“There is an urgent need to invest in unused capacity, otherwise we don’t see how the world will meet future demand. All of a sudden we could go from the “peak demand” scenario to the “peak supply” scenario, which is amazing, ”Malek said.

Even the return of Iranian oil to the market, which some analysts say would push oil prices down, would not pose a significant threat, he said. “In fact, at some point we will need Iranian oil because we are running out of spare capacity.”

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