Analysts are predicting that oil prices could soar to $100 a barrel based on mounting tensions in Syria.
The predictions came following reports that the U.S. and some of its allies were considering military action on Syria after the regime mounted a chemical attack over the weekend.
Managing director at Akap Energy, Anish Kapadia said in an interview that he does not think it unrealistic that oil prices will rise to triple-digit figures this year, if there is an escalation of tensions in the Middle East.
Oil Prediction 6 Months Ago
Kapadia had predicted six months ago that crude futures could reach the $60 to $70 a barrel mark, some market participants thought his claim was ridiculous.
Escalating Concerns of Military Action
Earlier in the week Crude futures soared to highs that were last seen in December 2014. Driven by escalating geopolitical concerns in the Middle East and the prospect of military action by the U.S. and some of its allies.
By Lunchtime on Friday Brent crude had gained 0.3 percent and was trading at $72.26 a barrel and West Texas Industrial (WTI) was up 0.4 percent at $67.35 a barrel. Since the start of the week both benchmarks have risen around $5 and were on track for the biggest weekly gain.
The news as it happened ………………….
Tweets by President Donald Trump, saying missiles will be coming nice and new and smart to Russia in a grave warning on Wednesday, referring to Syria.
Russia’s ambassador to Lebanon, responded saying that they would shoot down any missiles together with a targeted launch on the sites.
Following these remarks, oil prices showed gains.
Risk Premium, Alive and Well
Oil analyst at PVM Oil Associates, Stephen Brennock said geopolitical risk premium is alive and well and that President Trump’s unpredictable antics will continue and is here to stay.
Brennok predicts that in the near term oil will probably continue its climb.
The International Energy Agency (IEA) are sceptical and do not know whether the higher oil prices can be endured. In their monthly report they have left their forecast for demand unchanged together with their growth forecasts.