Asia’s richest man says get ready for $100 crude oil price

16 May 2010 16 May 2010

BonTrade

Asia’s richest man Mukesh Ambani said the world should be prepared for a three digit ($100 plus) crude oil price in the foreseeable future, in his first public appearance since winning a four year legal battle with estranged younger brother Anil Ambani.

“By most analyst accounts, crude oil prices will likely be above the $70 mark, and in the foreseeable future, in the worst case, we have to be prepared to again see a three digit oil price,” Ambani said at the Asia Petrochemical Industry Conference 2010 in Mumbai on Friday.

Emphasising that $80 to $100 was a norm in this ever changing global dynamic, Ambani, Asia’s richest man and the fourth wealthiest in the world, explained there was a need “to reset our thinking” and “find creative responses”, rather than hope oil prices will go back to what they were two decades ago.

Crude oil has been fluctuating in the past couple of years, touching an all time high of $147 a barrel in July 2008 before plummeting to $30 per barrel levels by December 2008. Oil has pulled back by nearly a 10th since reaching $87.15 a barrel on 3rd May, a one month high, as the euro weakened against the dollar against the backdrop of the Greece debt crisis.

Bank of America Merrill Lynch on 11th May repeated its forecast that crude prices will exceed $100 per barrel in 2011 as a result of growing demand in emerging economies while a Goldman Sachs note the same day said it estimated “long-term oil price of $65 to $90 per barrel from 2013 onwards and $72-96 per barrel from 2011 onwards”.