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SOCAR Trading predicts an increase in oil prices in 2021

SOCAR Trading SA (a trading subsidiary of SOCAR / SOCAR) expects the oil price to rise to $ 80 per barrel in 2021, and to over $ 100 per barrel in the next 18-24 months, said the chief trade director of the company Hayal Ahmedzade. “This year, the oil price will reach $ 80 a barrel as demand will rise sharply and producers will not be able to immediately respond with sufficient supply,” Ahmedzade said in an interview with Bloomberg. According to him, the excess oil reserves accumulated in 2020 in response to the pandemic will be completely depleted by this summer. At the same time, he added, very high steel prices could also shock the oil industry. “Soaring steel prices mean that it will be difficult for oilfield service contractors to build pipes, wells and other infrastructure needed to recover production on time and on budget. This will slow the supply response even if demand returns when countries are released from quarantine and other restrictions, “Ahmadzade said. “I wouldn’t be surprised if we see $ 80 a barrel in the summer or by the end of the year and above $ 100 a barrel in the next 18-24 months,” he added. Ahmadzade said that the company has already sold all the 15 million barrels of oil stored during the crisis. He also noted that he expects the participants in the OPEC + deal to reduce the volume of production cuts and will soon return to supplies at full capacity. “However, this will not be enough. Even with production increases in Saudi Arabia and Texas, there are fears that there will be shortages in 12 months. This will very quickly increase the price. The troubles of producers are exacerbated by the rising cost of borrowing, as banks apply higher rates on loans.” dirty “oil production. The cost of credit is much higher and the appetite for risk is much lower. The largest companies are cutting jobs and lowering capex,” he said. SOCAR Trading SA started its activities in December 2007. The company is engaged in operations for the sale of oil and gas in international markets. Currently, the company has offices in Geneva, Singapore, Dubai, London, Houston. Source: FINMARKET.RU

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