The oil guru who predicted last year’s rout said $100-a-barrel crude is likely to return within five years as faltering supply fails to meet demand.
Gary Ross, the founder of consultants PIRA Energy Group, said oil markets are not nearly as oversupplied as many believe and spare capacity is tight since Saudi Arabia is pumping all the crude it can without new drilling, Bloomberg reported.
“Current prices are unsustainable,” he said Monday in an interview in London. “It is hard not to see oil hitting $100 a barrel at some point in the next five years.”
The forecast from Ross, who last year turned bearish on oil before prices shrank by half, is at odds with other analysts and investors bracing for “lower for longer” prices, a term coined by BP Plc Chief Executive Officer Bob Dudley.
Saudi Oil Minister Ali Al Naimi said in December the world may not see $100 crude again, while the International Energy Agency has described the markets as “massively oversupplied.”
Such views fail to take into account the impact of $50 oil on output outside North America as producers reduce spending, according to Ross. The likelihood of further disruption to OPEC supplies and the boost to consumption from cheap fuel also support prices, he said.
Brent crude, the global benchmark grade, lost 10 cents to $56.55 a barrel on the London-based ICE Futures Europe exchange at 1:06 p.m. Singapore time on Tuesday. West Texas Intermediate oil fell 18 cents to $49.97.
