Oil may hit $160 as inventories near record lows
What's the story
Exxon Mobil, a leading US energy company, has warned of a potential spike in global oil prices. The company has predicted that the world's oil inventories could soon hit record lows, pushing crude prices up to $150-$160 per barrel. Neil Chapman, Exxon's Senior Vice President, made the prediction during a Bernstein conference in New York. He said "We're approaching unheard of inventory levels."
Market dynamics
Chapman predicts price surge
Chapman explained that if storage continues to deplete, a price surge is inevitable. He said, "higher prices would eventually curb demand and help rebalance the market." The executive added: "I mean really, really low levels...You can debate whether that's going to hit, those really low levels, in two weeks or three weeks. Once you get to that point, then you'll see price shoot up."
Price fluctuations
Oil prices decline on US-Iran ceasefire extension news
Oil prices have been on a downward trend lately. This is due to the news of a 60-day ceasefire extension between the US and Iran. Brent crude is currently trading at around $93 while US oil is priced at about $88 per barrel. However, Chapman believes this decline may not be permanent if inventories continue to deplete.