Prices for crude could hit more than $100 per barrel due to mounting tensions in the Middle East, according to founder and managing director of Akap Energy Anish Kapadia.
Earlier this week, both Brent and West Texas Intermediate (WTI) skyrocketed to three-year highs, boosted by ongoing threats in Syria and increased concerns about a possible military strike by the US and its allies.
“I don't think its unfeasible to see triple-digit oil prices at some point this year if things really kick off in the Middle East,” the analyst said, as quoted by CNBC.
Kapadia added that investors had been “laughed out the room” when six months ago they predicted $60-$70 for crude futures. However, since then, escalating tensions in the Middle East spawned the prospect of oil prices surging to more than $100 a barrel later this year, the expert stressed.
On Wednesday, oil and gold soared shortly after US President Donald Trump tweeted a warning to Russia to “get ready” for missile strikes on Syria. The threat followed reported claims by Russia's ambassador to Lebanon that Russia would shoot down American missiles headed Syria's way.
Brent crude was trading at $72.34 at 13:24 GMT on Friday, up around 0.32 percent, while American benchmark WTI also traded higher at $67.33 per barrel. Both benchmarks have gained about $5 since the start of the week.
“Trump's will-he-or-won't-he antics are here to stay and will, therefore, ensure that the geopolitical risk premium remains alive and well,” Stephen Brennock, oil analyst at PVM Oil Associates, told the media, stressing that prices for crude would keep on rallying in the near term.
For more stories on economy & finance visit Eyes On Events's business section