Higher jet fuel and gasoline consumption will boost Beijing's demand for oil in the fourth quarter, the Black Gold CEO says
Oil prices may surge to $100 per barrel by the end of the year, driven by a swift recovery in China's tourism sector coupled with lower supply from major producers, according to the CEO of Black Gold Investors.
Speaking at the Asia Pacific Petroleum Conference (APPEC) in Singapore on Monday, Gary Ross noted that domestic flights in China have reached 110% of their pre-pandemic levels, up from about 75% in the fourth quarter of last year. International flights have also rebounded, from close to zero to about 75% of the level seen prior to pandemic lockdowns. The rebound sharply accelerated after China lifted its ban on group travel to most destinations last month.
"You're gonna have a big increase in jet fuel demand probably of something like 500,000 barrels a day in China alone," Ross predicted.
He noted that road travel in Asia's biggest economy has also been on the rise, and as local drivers prefer vehicles with traditional engines rather than electric ones for longer trips, demand for gasoline is likely to soar further.
"Gasoline sales have been absolutely astonishing during the summer... People are driving like crazy. The year-on-year comparisons are going to be dramatic... I expect a huge increase in demand in the fourth quarter of 2023," he stated.
READ MORE: Saudi Arabia's oil exports fall to 21-month low
Meanwhile, the global oil supply has been tight due to recent output cuts by major producers, including Russia, Saudi Arabia, and their OPEC+ allies. Shipments of crude from Saudi Arabia slumped to the lowest level in almost two years in July. Due to supply constraints, global benchmark Brent crude has risen by almost a quarter since late June, trading above $90 per barrel on Tuesday. Ross believes that supply cuts may have to be halted once Brent price hits $100 per barrel.
For more stories on economy & finance visit RT's business section