Jim O’Neill Thinks Brent Could Surge to $80

Closely followed economist Jim O’Neill thinks Brent crude oil might surge to $80 a barrel in the next year before falling back to roughly $60 by next November.

That would mark a 26 percent run-up from today’s price of about $63.50 a barrel. International benchmark Brent prices have already rallied about $20 a barrel, or more than 40 percent, from the year’s lows in June. Brent hit a nearly 2½-year high of $64.65 a barrel earlier this month.

Brent graph

Conventional wisdom holds that prices won’t budge much over the next year, says O’Neill, but the former chairman of Goldman Sachs Asset Management and creator of the “BRIC” acronym is not running with the herd.

“While oil prices could be about $60 per barrel in November 2018, my guess is that they will have risen to about $80 per barrel in the meantime,” O’Neill wrote in Barron’s this weekend.

O’Neill, now an economics professor at the University of Manchester, says the market is finally waking up to the fact that global economic growth is gaining momentum and likely expanding at 4 percent or higher. That means there will be more demand for oil.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza