BAKU, Azerbaijan, Nov.23
By Leman Zeynalova – Trend:
Oil prices may grow to $105/bbl if the US Federal Reserve System (Fed) increases interest rates, Ali Agaoglu, SOCAR Turkey Group Treasury Director, said in an interview on SOCAR’s Youtube channel, Trend reports.
“The peak level of oil prices will depend on the decision of the US Federal Reserve System (Fed) to increase the interest rates. If Fed makes such a decision in the near term, oil prices may rise to $105 per barrel. Lower oil price is not beneficial for anyone. In particular, lower oil prices hinder new investments. OPEC+ managed to successfully balance the market and push the prices up. It also benefited Azerbaijan. Currently, there is a certain balance between oil supply and demand. Oil suppliers even may to some extent increase their production. I believe that the current $85 per barrel may fall to $75 per barrel, but will not drop below this level in 2022-2023,” he said.
Ali Agaoglu doesn’t expect the peak oil demand to come soon.
“The process of replacement of classic cars by electric vehicles may be accelerated in the coming years, but it is not expected in the near term. Therefore, peak oil demand is yet to come. Renewable energy sources will not fully replace fossil fuel at least due to the demand in transport sector. I don’t think that the switch from classic cars to EVs will be a speedy process. Production of a new model of a car takes at least two years. The payback from investments in that model take around 4.5 years and profit from the sale will take 10 years. Given that carmakers do not change one model for around 8-10 years, the change in the car technology globally will not be a rapid process,” he explained.
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