Why oil price will this year surge to $80 a barrel from $64

The oil market is working: High-cost production is being retired and new projects are delayed or cancelled while demand is again surging.

That means though the movements will be volatile, that crude oil is as likely to be over $80 a barrel in the coming year, up from today’s price of around $64 a barrel, even as the consensus in the markets remains much more gloomy.

So far this year, there have been 24 barrels sold for every one burned. That means the price is driven by speculative demand rather than real supply and demand. There are many supply accidents waiting to happen from Venezuela to Africa. Sanctions on Russia are biting and projects are delayed.