Oil prices will rise in the coming months but they will not hit the psychological $100 dollar mark, analysts predicted, as a resurgence Thursday saw Brent crude rising to $78 per barrel.
The price of the blend of crude had hit $80 last week only to drop to $75 on Monday following a revelation by the Organisation of Petroleum Exporting Countries (OPEC) that it planned to increase supply to the market, plugging the gap left by missing Iranian oil and declining production in Venezuela.
But prices have begun to pick up again, leading some analysts to predict that it would continue to climb but will not reach $100.
It has long been speculated that oil might go as high as $100 per barrel, but oil and gas research analyst Ashley Kelty at Cantor Fitzgerald said that it was very unlikely that it would surpass $90.
Kelty said oil prices will most likely increase again and fluctuate between $80 and $90 but that OPEC and Russia would increase supply before the price would be allowed to reach the $100 mark.
Mihir Kapadia, chief executive of Sun Global Investment, believes that the peak of oil prices have now been reached, adding that they will not increase much beyond what has already been seen this month.
Over the past few weeks, there has been a lot of pressure on OPEC to even out the market by increasing supply in lieu of the decreased output from both Iran and Venezuela.
Even Donald Trump, the US president, urged the organisation to increase production which both Kapadia and Kelty believe had an important impact on driving prices down.
However, US production has increased significantly and seen a growth of 27 percent in the last two years to around 10.73 million barrels per day. However, according to Kelty the US does not have sufficient capacity infrastructure to keep up the current output.
This could lead to the US reducing output and contribution to the global market which would, in turn, mean that prices may increase again.
OPEC will be meeting in Vienna on 22 June to discuss how it intends to deal with the supply issue although it is predicted that it will raise output by around 1m barrels per day.