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Oil to Rebound to $70 a Barrel by Year-End, Houston Oil Analyst Predicts

Houston oil analyst Brandon Blossman tells Colliers crowd that oil will go to $70 a barrel by year end.

Houston oil analyst Brandon Blossman tells Colliers crowd that oil will go to $70 a barrel by year end.

HOUSTON – A leading energy analyst predicts the price of oil will surge to $70 a barrel by the end of the year, a sharp increase that offers hope to the shaky energy industry.

In a speech before a crowd of 400 business people at the Houston Country Club Tuesday night, Brandon Blossman, managing director of research at Tudor Pickering Holt & Co., an investment banking firm specializing in the energy industry said the upswing in pricing would continue into 2017.

Blossman said oil will rise to “$70 by the end of the year and $90 by the end of next year.”

His prediction touched off applause, amazement and swelling buzz of reaction from the audience – The Colliers International Trends 2016 Commercial Real Estate Market Update.

West Texas Intermediate crude, which has been hovering around $30 a barrel, nosedived over the last year or so, after hitting a high of $107 in June 2014.

The decline in oil prices has hurt the Houston commercial real estate market, particularly the office market and multifamily, according to Colliers Houston President Pat Duffy.

Blossman, calling for $90 a barrel by the end of 2017, noted in his remarks that forecasting energy prices is exceptionally difficult.

But, he said, supply and demand is moving back toward equilibrium, with production stabilizing. Global demand is returning and that should support price increases later in the year. The oversupply of production is not extreme currently, although a lot of surplus oil exists in storage.

Blossman is not alone in his optimism.

On Monday, Oilman T. Boone Pickens predicted on CNBC television that oil prices would double in 2016 to the $50 to $60 a barrel range or at least to $52 a barrel.

On the other hand, Goldman Sachs has been saying that oil could fall to $20 a barrel.

The price of oil needs to rise in order to make domestic fracking drilling viable, Blossman told the Colliers International crowd.

“Fracking is hard to do and it takes at least $50 a barrel pricing to make money,” Blossman said. “If crude stays below $45, the U.S. independent E&P model does not work.”

Feb. 3, 2014.

 

 

 

 

 

 

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