OIL HEADING TO $70 A BARREL THIS YEAR, RENOWNED TRADER SAYS
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APRIL 7, 2017
He can’t drive 55. Instead, Pierre Adurand is pegging oil prices to hit $70 per barrel later this year. The managing partner at Adurand Capital Management says that while the first few months haven’t played out the way he thought, those conditions won’t last.
"I think oil prices are likely to recover to around $70 … I think the market will switch to backwardation – sustainable backwardation – by late summer and that will bring the next wave in oil prices," Andurand told CNBC at a recent event where he received the EMEA Investor's Choice Awards for 2017.
"U.S. shale producers have been hedging a lot of their production, capping prices, so the improvements in fundamentals were not priced in at all, but I believe that now when people will really see that inventories are going down fast, that eventually the fundamentals will win and prices will go higher."
He says the price level will be the deciding factor for oil producers when it comes to renewing the agreement to stem output levels. That agreement, put in place last November, is up for renewal on May 25.
Adurand says U.S. President Donald Trump won’t have “much impact on oil supply and demand for now,” but adds that could change if he restores sanctions on Iran.