Oil prices will rocket to $100 on the back of China's easing of its COVID-19 lockdown policies, Energy Aspects' Amrita Sen says
Suriyapong Thongsawang
- China's easing of its zero-COVID policy will push oil prices to $100 a barrel, Energy Aspects' Amrita Sen says.
- "This is going to be probably the single biggest driver of oil prices," Sen warned in an interview with CNBC.
- Oil prices have fallen recently, with Brent crude nearly flat for the year.
Oil prices will head to $100 a barrel as China eases some of its restrictive COVID-19 lockdown policies, according to Energy Aspects' Amrita Sen.
In an interview with CNBC on Monday, Sen pointed to the impact of China's reopening, which is expected to exert more upward pressure on oil demand globally.
"Chinese oil demand has been bottled up for three years now. And China has a huge multiplier effect on the region," Sen said, noting that 25% of Korean petrochemical exports and 20% of Thailand's tourism is linked to China.
"China reopening will be very very bullish for oil markets. Now, again, not expecting that to be overnight, but over the course of next year, this is going to be probably the single biggest driver of oil prices," she added.
The increase in demand will layer on top of other supply pressures, and comes alongside the end of further releases from the US Strategic Petroleum Reserve. Meanwhile, OPEC+ has stuck to its plan to slash production by 2 million barrels a day.
Sen predicted West Texas Intermediate crude to soar into the triple-digits, noting that US shale producers she's spoken to have said they are "not happy" with the current price of oil, with Western Texas Intermediate crude currently hovering around $70 a barrel.
Russia has also threatened to retaliate against the west's $60 price cap on Russian oil, with Putin recently floating a production cut to raise oil prices for nations that enforce the cap. JPMorgan warned over the summer that Russia's retaliation against a price cap could push oil to $380 a barrel in the most extreme scenario.
Sen said she believed Russia would continue to sell crude to friendly nations like China and India, meaning a production cut would primarily impact and push prices up for western customers.
"I think he might tactically turn off things here and there, but again, directed toward the west, rather than his key consumers in the east," Sen said.
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