There is no reason for oil to hit $100 a barrel, BP Chief Executive Bob Dudley said.
"There are people who predict the oil price of $100 per barrel. I do not think it will reach $100 unless there are any restrictions on oil supplies. I also see no reason for the price to hit this high," Dudley said, noting that the agreement to reduce crude oil production led to a change in the global energy landscape.
CEO and co-owner of Russian oil major Lukoil Vagit Alekperov said earlier that he does not expect oil prices to grow to $100 per barrel.
"I do not think that there will be such a high price, because the price is now regulated by a reduction that was reached by the OPEC+ agreement. It is being regulated by those statements that come from the U.S. on limiting oil exports from Iran. A sharp reduction of Venezuela’s production. These are those factors that can be changed today," Alekperov said.
Oil prices renewed 4-year highs in April and May. The Brent oil price exceeded the psychological level of $80 per barrel on May 17 for the first time since November 25, 2014, but in late May oil prices fell by 3-4% on reports about potential softer terms of the OPEC+ deal.
A leading analyst of the National Energy Security Fund, a lecturer at the Financial University under the Government of the Russian Federation, Igor Yushkov, speaking with Vestnik Kavkaza, noted that companies are trying to calm the market and assure traders that there will be no oil shortage. "The fact is that the more oil prices jump, the more difficult it is for companies to make decisions on projects, therefore, the level of prices is not as important as their stability," he said.
"BP and Lukoil are proceeding from the two opposite trends: on the one hand, the OPEC + deal saves the market from excess supply, we spend oil reserves that have accumulated all over the world, the consumption level is catching up with the output level and oil prices are rising - and on the other hand, rising prices make US shale projects profitable again, they increase supply, so at some point the same balance of supply and demand will be established. With a further rise in prices, the US will extract more oil, the supply will increase and, as a result, prices will go down, which will make a number of US projects to leave the market again. BP and Lukoil announced that this balance will be reached before $100 a barrel," Igor Yushkov explained.
The expert drew attention to the fact that the oil price of $100 per barrel is not an end in itself for companies. "Of course, high prices are very important for any exporting countries, but the most part of this price increase is received by the state, not the company. This is why the price of $100 is simply not necessary to them, especially since the revival of US projects at such a price means growth competition in the market," the leading analyst of the National Energy Security Fund said.
Higher school of tariff regulation at Plekhanov Russian University of Economics, Ivan Kapitonov, agreed with Yushkov. "In general, oil prices are prone to increase now, which cannot but be alarmed since US shale companies are increasing their oil production at an accelerated rate. The OPEC + deal is questionable in such a situation, since agreements to reduce oil output lose meaning at such prices. Accordingly, the prices should be lowered. The current statements are aimed at reducing the growth rate of oil prices. In general, in conditions of accelerated growth of US production, we will not see prices at $100 per barrel in the near future, as it requires something global to happen," he said.
"The price threshold of $100 is important first of all for the financial market, which likes fancy large numbers. If it is passed, then the price may rise up to $110 per barrel, but then it will fall back," Ivan Kapitonov predicts.
