Fund manager: $300 oil is 'not impossible' within a few years

  • Leading oil hedge fund manager, Pierre Andurand, said that $US300 per barrel oil is “not impossible” within the next few years.
  • Lack of investment in new production due to low oil prices and fears of electric vehicle peak demand could create higher crude prices, Andurand said in a tweet on Sunday.
  • “So paradoxically these peak demand fears might bring the largest supply shock ever,” he wrote, adding, “If oil prices do not rise fast enough, $US300 oil in a few years is not impossible.”

LONDON – Pierre Andurand, a leading oil fund manager, said that lack of investment in new production could lead to a situation where $US300 per barrel oil is “not impossible” within the next few years, Bloomberg reported.

Andurand, who runs oil hedge fund Andurand Capital Management LLP, wrote in a string of tweets on Sunday that companies may be less willing to risk investment in long term oil projects because of low crude barrel prices and a predicted peak in electric vehicle demand.

The price of oil could then spike in the future if the lower oil production meets higher than expected demand.

“So paradoxically these peak demand fears might bring the largest supply shock ever,” he wrote, adding, “If oil prices do not rise fast enough, $US300 oil in a few years is not impossible”.

The French hedge fund manager, who is known for being bullish on the market, also said that $US100 per barrel oil will not harm the economy. “Demand is inelastic” and the economy can absorb price increases, he said.

“So no, $US100 oil will not kill the economy… And we need +$US100 oil to encourage enough investments outside of the U.S.”

The tweets were spotted by Javier Blas, Bloomberg’s chief energy correspondent:

The comments reflect those made by Saudi Oil Minister Khalid Al-Falih who this month said that oil prices could rise to $US75 without causing economic damage. The Organisation of Petroleum Exporting Countries (OPEC) plan to maintain their cuts in production which have helped boost the prices so far.

Concerns over future oil investment come during a time of uncertainty for the industry. A new survey by the Sustainable Investment and Finance Association (UKSIF) reported that the number of fund managers that expect the value of oil firms to drop in the next few years has doubled.

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