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WSJ: Oil May Rise To $150 Per Barrel

WSJ: Oil May Rise To $150 Per Barrel

Oil quotes after a volatile start to the year may rise above a hundred dollars per barrel, and by 2025, up to 150, analysts admit, the opinion of which leads the Wall Street Journal.

The reason for this increase in prices, according to their forecast, will be a decrease in investment in hydrocarbon production. "Such financial pressure will be significant. Some producers will find it difficult to sell products," said Trevor woods, investment Director at Northern Trace Capital.

In April, US oil company ExxonMobil said it would reduce capital expenditures by 30 percent and operating costs by 15 percent due to low commodity prices. British BP lowered its capital expenditure forecast by a quarter on April 1.

The reduction in investment will have a lasting impact on oil production opportunities, according to JPMorgan analyst Christian Malek. According to him, production will fall by five million barrels a day — that is, by five percent compared to pre-crisis levels. Therefore, the expert believes that by 2030, investments of 625 billion dollars will be required for supply and demand to reach a balance, and as a result, prices will increase.

Other analysts note that demand for raw materials will not recover soon, so prices will remain low. Most experts are inclined to believe that quotations will remain at the level that will allow producers to make a profit by extracting the necessary volume of hydrocarbons to meet the demand for a long time. At the same time, the coronavirus pandemic complicates forecasts: investors are not sure about the future preferences of consumers and the transition to cleaner energy sources.