Oil industry betting high oil prices are temporary

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The industry is treating the reopening of the global economy and Russia’s war in Ukraine as short-term events and doesn’t plan to rev up production, writes Olive.

It might seem that oil prices have only one direction in which to go, steadily higher.But that’s not the way to bet.

You can choose to believe in a world oil price that soars to $300 a barrel (U.S.), as Russia’s deputy prime minister, Alexander Novak, speculated on this week. Or you can look at what the oil industry is planning for, which is a world price that stabilizes in the range of $70 to $90 per barrel over the next 18 months.

That’s a significant decline from the current range of $110 per barrel, a drop we should start to see at GTA gas pumps as early as this fall.

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Original Article Source Credits: TOTONTO STAR, https://www.thestar.com

Article Written By: David Olive

Original Article Posted on: March 24, 2022

Link to Original Article: https://www.thestar.com/business/opinion/2022/03/24/oil-industry-betting-high-oil-prices-are-temporary.html