$100 Oil Forecast: A Second Wave of Price Surge May Come at the Pump

Rising oil prices increase concerns in global markets.

Although the high demand of the summer months and the additional decisions to cut production by the two largest exporters, Saudi Arabia and Russia, caused the price of a barrel of Brent oil to exceed $90 this week, it is estimated that the price could exceed $100.

Oil prices rose about 25 percent in three months.

MARKET FORECASTS

In the report shared the day before by the raw materials research unit of Goldman Sachs, one of the main US banks, it was estimated that the price of a barrel of Brent oil could reach $107 in 2024 due to the decisions supply cut from Saudi Arabia. and Russia.

Dr., head of oil research at London-based energy consultancy CMarkits. Yousef M. Alshammari stated that if, in addition to cuts in oil production, the US Federal Reserve (FED) keeps the interest rate constant at its meeting this month, the level of $100 oil could be reached.

Osama Rizvi, who works as an energy analyst and economist at Primary Vision, also predicted that a $100 oil price could be seen, but it would not be permanent at this level.

DEVELOPMENT CAN HAPPEN WITH VENEZUELA AND IRAN

Independent macroanalyst Piero Cingari also pointed out that the US administration’s hands are tied in terms of supply, since crude oil reserves in the US are at the lowest level in the last 40 years and that countries with large reserves such as Venezuela and Iran cannot provide sufficient supply due to US sanctions.

Some experts claim that the US administration could seek a rapprochement with Venezuela and Iran to reduce oil prices.

Cingari said that if the US economy does not enter a recession and China announces a strong incentive package to stimulate the economy, oil prices may reach the psychological threshold of $100.

Cingari said rising oil prices may cause developed economies to raise interest rates further, which could trigger a recession. He stated that it may increase, but this may drag developed economies into recession, and if there is a recession, oil prices will fall.

The rise in oil prices and the $100 predictions were widely covered in newspapers such as the American The New York Times (NYT) and the British The Financial Times (FT).

The prediction by Nadia Martin Wiggen, one of the directors of Svelland Capital, that Brent oil could exceed $100, as in the first months of the war in Ukraine, also appeared in the NYT.

The Financial Times highlighted that rising oil and fuel prices could affect next year’s elections in the United States and strengthen the position of Republicans against President Joe Biden.

RAIN OF INCREASE AFTER ELECTIONS

The government, which made tax cuts before the election and curbed exchange rates by depleting reserves, made record tax increases after the election and gradually raised the dollar exchange rate.

On May 14, in the first round of elections, the price of a liter of diesel in Istanbul, which was 18.58 TL, exceeded 38 lira with the exchange rate and tax increases.

The increase in diesel prices in the three months after the elections exceeded 100 percent.

On May 14, in the first round of the elections, the price of a liter of gasoline in Istanbul, which was 19.81 TL, exceeded 37 TL due to the increase in the exchange rate and taxes.

The increase in gasoline prices in the two months after the election approached 90 percent.

Rising oil prices may trigger a second wave of fuel price increases in Turkey and may further increase already high inflation.