(Updates to add Vitol Bahrain MD comments in paragraphs 4-6,
comments from Mercuria’s Shenouda in paragraphs 7-9)
FUJAIRAH, Oct 11 (Reuters) – The deputy CEO of commodity
trader Mercuria, Magid Shenouda, said on Wednesday that oil
could go to $100 a barrel if the situation in the Middle East
escalates.
“I don’t think there are that many analysts that believed
that it was going to go to $100, in a normal circumstance. I
think the events that have happened recently, I think that puts
a great cloud (over) where things could go, because the market
is not pricing much of a conflict,” Shenouda, also Mercuria’s
global head of trading, said at an industry conference in
Fujairah, the United Arab Emirates.
“Volatility went up but the price action was actually quite
muted – $3 a barrel is not that significant – so the market is
fading any real action. But there is a high probability that
this could escalate, and if it does escalate, then I think we
can see $100.”
Kieran Gallagher, Vitol Bahrain’s managing
director, echoed the sentiment.
“The Q4 outlook on demand is quite healthy. So there’s an
argument to say we’ll still be at a healthy price set. What we
need to remember is the run from $85 to $95 happened quite
quickly,” he said.
“Fundamental reasons why we might hit $100, that’s
questionable – I think we would need to see a geopolitical event
to perhaps hit that. But the demand outlook is certainly healthy
enough to keep us around the $90 price set.”
Shenouda also said it was difficult for the oil industry to
access capital.
“I don’t think inflation is under control. There are people
out there trying to raise capital at 20-plus percent. This is
not sustainable. And those are oil producers,” he said, adding
that the $260 million IPO of Seacrest Petroleo this year “nearly
failed.”
“There is not capital that’s available for this industry.”
(Reporting by Yousef Saba; editing by Louise Heavens)