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Energy Expert: Oil Could Surge 30 Percent in Winter

Energy Expert: Oil Could Surge 30 Percent in WinterEnergy Expert: Oil Could Surge 30 Percent in Winter

US crude oil has not traded at $95 a barrel since 2014, but this is the year that could change.

Energy expert John Kilduff counts Iran sanctions as the top reason why West Texas Intermediate could climb as much as 30% by winter and that could spell $4 a gallon of unleaded gasoline at the pumps, CNBC reported.

"The global market is tight and it is getting tighter, and the big strangle around the market right now is what's in the process of happening with Iran and the Iran sanctions," the Again Capital founding partner said on CNBC's "Futures Now".

"These Iranian barrels that we are going to lose, it is really going to hurt. It is really going to make a difference and tip the scale in my view to an upside surprise."

His thoughts came as WTI crude oil exceeded $70 a barrel on Thursday and rallied to a one month high.

But that will feel cheap compared to what comes next. Iran's oil exports are plummeting, as refiners scramble to find alternatives ahead of the reimposition of US sanctions in early November. That in turn has helped drain a glut of unsold oil.

"To the extent we are seeing the Iran barrels lost to the market, you are looking at a WTI price and Brent in the $85-95 range, potentially," Kilduff said.

Pair Iran with a booming US economy and soaring driver demand for gasoline, and Kilduff contended that Wall Street is coming up with a bullish scenario for crude that it has not had in years.

"There has been incredible US refinery demand and there has been huge US driver demand for gasoline. The fundamental picture is the strongest I have seen in quite some time," Kilduff said. "Everybody has got a job, everybody is driving to that job and they are going to continue to drive to that job no matter what gasoline costs."

On Tuesday, US light crude rose $1.31 a barrel from Friday’s close to a peak of $71.1, its highest since mid-July.

Benchmark Brent crude was up $1 at $79.1 a barrel on Tuesday.

 

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