NEW YORK (Reuters) - The global crude surplus that caused a price rout has largely been absorbed, resulting in higher crude prices, Gary Ross, founder of PIRA Energy and head of Global Oil Analytics for S&P Global Platts, said on Thursday.
Brent crude could make a new short-term high, perhaps above $60 a barrel by year end and will rise to $70 within the next five years, he said, speaking to reporters at the annual PIRA client seminar in New York.
“We think it should make a new high before the end of the year,” Ross said, adding that with the large surplus that existed at the beginning of the year now gone, “we’re not going to see $30 oil anymore.”
Brent futures, the global benchmark for crude, was trading at above $56 per barrel on Thursday.
Ross said he believes there is a danger that the Organization of the Petroleum Exporting Countries (OPEC) and non-members, who agreed to cut supply by 1.8 million barrels per day (bpd) through March of next year, continue to draw down supply even as the world’s global surplus has dropped significantly.
The International Energy Agency, on Thursday, said they expect to see global supply and demand roughly in balance next year, even though demand will slow next year.
Reporting By Jessica Resnick-Ault; Editing by Chizu Nomiyama and Marguerita Choy