Oil prices expected to rise to $100 per barrel by late 2023

Published: Jul. 17, 2023 at 5:54 PM CDT
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MIDLAND, Texas (KOSA) - Heading into the third quarter, experts predict oil could rise to $100 per barrel by the fourth quarter.

The price per barrel currently sits at $74.

The demand for oil is high right now and more production is needed to meet it, according to Judy Stark, the president of Panhandle Producers and Royalty Owners Association.

“There’s a lot of factors involved in that and the majority of it is what’s taking place in the world,” Stark said.

The $100 prediction is based on a variety of factors. Stark says global events, like China’s reopening after COVID and the war in Ukraine affect the price, as well as a global reduction in production and the Biden administration’s deterrence in production.

Mostly, it comes down to supply and demand, said Michael Lozano, government affairs and communications at the Permian Basin Petroleum Association.

“[It’s] not terribly surprising. We’ve seen declining inventories of crude in production in other places around the world,” Lozano said. “And [when] we have higher demand and less supply of anything, you’re gonna see prices rise.”

The price increase has benefits and costs. More production could mean more jobs in the Permian Basin, but since oil is a product of gas production, prices at the pump could rise.

“For as much as operators produce oil and gas in the Permian Basin, we’re also customers of the product we produce as well,” Lozano said. “So this does create some of those challenges when it comes to price.”

Lozano says production is at an all time high and growing in the Permian Basin. He says operators have been disciplined in keeping pace with demand.

“The Permian is, that’s kind of the great place in the state right now. I think they’re going to be strong no matter what,” Stark said.

Lozano agreed that production and growth are healthy in the basin. The prediction was made in a report from Enverus Intelligence Research.