Oil price could hit $150 within five years, says Guinness

Experienced commodity investor Tim Guinness expects the oil price will hit $150 a barrel in the next five to 10 years before a demand shock reverses the current trend of increasing prices.

Guinness, lead manager on the recently launched Guinness Asset Management Global Energy fund as well as a raft of other propositions, said the price of the ‘black gold’ would continue to grow in the long term, with OPEC managing it up steadily until it reached a level where demand was curbed by steep prices.
He said: ‘The oil price is currently at around $106 a barrel, but energy demand from emerging economies is a near irresistible force, and we are unlikely to see a curbing of demand without a $150-$200 spike.’

Mapping out the investment case for his latest venture, Guinness noted that OPEC had managed to build in an average increase in price of roughly $10 a year without causing demand to fall, a factor which supported investment into oil producers.

As well as OPEC’s influence, Guinness identified that the price of proven oil reserves, which are currently changing hands at a discount, was also likely to return to historic levels, providing further upside.

Citywire