Oil prices are headed for $100 despite U.S. efforts to release reserves, analyst says
Oil prices could climb higher despite the U.S. and other major consumers releasing millions of barrels of oil from their reserves to try to keep energy prices down, one analyst told CNBC.
“It’s not going to work simply because the strategic petroleum reserve — any country’s strategic petroleum reserve is not there to try to manipulate price,” Stephen Schork, editor of the Schork Report, said Wednesday on CNBC’s “Squawk Box Asia.”
Strategic petroleum reserves exist only to offset short-term, unexpected supply disruptions, he explained.
“There’s a considerable amount of bets out there that we will see $100 a barrel oil,” Schork said, adding it could happen as early as the first quarter of next year, especially if there is a cold winter in the Northern Hemisphere.
Calming oil prices
Oil prices have jumped more than 50% this year, with demand outstripping supply as more countries emerge from national lockdowns and severe restrictions imposed since last year due to the pandemic. Resumption of international travel as more nations re-open borders is also boosting jet fuel demand.
Global benchmark Brent surpassed the psychologically key threshold of $80 per barrel in October and prices have held near that level. As of Wednesday afternoon in Asia, the international contract traded near $82.50.
Reference: CNBC
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