How strong oil demand will keep prices above US$100 a barrel despite recession fears
Amrita Sen’s OPED in The Globe and Mail
Fears of a recession are dominating the market, raising questions around the potential impact on oil demand and inventory, and ultimately, its price.
There’s been a dramatic sell-off of energy stocks recently – in fact, the worst sell-off since March 2020, according to Bloomberg LLP. So, it’s understandable that investors have fears about a correction with such elevated price levels. But this isn’t cyclical – it’s a structural bull market.
If there’s a recession, oil prices will move down slightly, but the supply versus demand gap is so large that it’s unlikely that prices will go below US$90 a barrel, or, at best, US$80. It won’t hit the lows seen in the past cycle.
This op-ed is written exclusively for The Globe and Mail and will interest all energy participants, particularly North American and Canadian market players.
