Ernst & Young warned of the risk of oil prices rising to $150

Since the start of the week, oil prices have dropped by over 6%.

Much of the risk premium is reduced when there are no oil supply disruptions.

It is predicted by Goldman that there will be a shortage of oil until 2024.

Oil supply restrictions in Saudi Arabia will remain in place until the price of oil reaches $110.

Ernst & Young cautioned that a significant increase in oil prices could occur if the Middle East conflict intensifies.

Oil prices have nearly returned to their pre-conflict state prior to the start of the Hamas-Israel dispute on October 7.

Reuters reported that, as worries about the expansion of the military conflict in the Middle East to other countries subsided, quotes dropped. The lack of any immediate disruption to oil supplies in the region has caused the war risk premium to decrease significantly.

Weak economic data from the Eurozone and the UK is causing prices to drop, and the outlook for energy demand is deteriorating. This is evidenced by the fact that business activity in the Eurozone in October reached its lowest point in the last three years.

According to Goldman Sachs, the oil market deficit is expected to persist until 2024, with a peak of 1.1 million barrels per day (b/d) in the fourth quarter of the year and 0.8 million b/d in 2024.

It is anticipated that Brent oil will reach $100 by June of the following year, and prices are expected to stay within the $80-$105 range for the duration of the year.

Pierre Andurand, an oil trader, believes that Saudi Arabia will not reduce its supply restrictions until the price of oil reaches $110. He believes that the kingdom's decisions will continue to be a major influence on the oil market.

Anduran noted that Brent is still below $90, despite the conflict in the Middle East. He did not dismiss the possibility of a direct confrontation with Iran, which could have a huge impact on the situation.

Ernst & Young (EY) has predicted that oil prices could reach $150 per barrel if the United States or Iran become involved in the conflict between Israel and Hamas.

EY cautioned that if the situation were to be so dire, the world economy would be significantly impacted, with the global stock market potentially dropping by 20% and the US dollar increasing by 10%.