- Hedge fund manager Andurand: Full reopening of China’s economy could push oil prices above $140 a barrel.
- Andurand: The market underestimates the magnitude of the surge in demand.
- Andurand said last week oil demand will be somewhat limited by growth in the electric vehicle sector.
Crude oil prices could top $140 a barrel later this year if China’s economy fully reopens, hedge fund manager Pierre Andurand said on Friday.
Andurand sees a possibility that crude oil demand will grow by more than 4 million barrels a day this year — a 4% increase from last year. This far exceeds the growth in crude oil demand reported by other oil market forecasters for 2023.
“I think oil prices will go above $140 a barrel once Asia is fully reopened, assuming there will be no more lockdowns,” Andurand said, adding that “the market is underestimating the magnitude of the surge in demand that will happen.” he will bring”.
Andurand’s forecast goes against the trend that crude oil prices have set so far this year. In the first week of the year, crude oil prices plummeted 9% in the first two trading days, the worst start to a year since 1991.
Last week, Andurand said in a tweet that oil demand could rise between 3 and 4 million bpd this year, helped by the shift from oil to gas.
China’s reopening has been on the oil industry’s radar since it implemented its zero-Covid policy and locked down much of its economy. China recently made major changes to its Covid policy, abandoning its strict measures in favor of relaxed testing requirements and travel restrictions. But China’s reopening has been plagued by a fresh wave of Covid, which has put many oil bulls off looking forward to a significant surge in demand.
Andurand said last week that oil demand will be somewhat limited by growth in the EV sector, as EVs have the potential to crowd out 600,000 bpd of oil demand.
By Julianne Geiger for Oilprice.com
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