Peter McGuire forecasts short-term surge in crude oil prices, expects favorable outcome from OPEC+ meeting

Peter McGuire predicted a short-term price range of $83 to $84 per barrel, with the potential to reach $85 by year-end.

Peter McGuire, CEO of XM Australia, shared optimistic views regarding the near-term outlook for crude oil, as the OPEC+ meeting scheduled for November 26 approaches. In an interview with CNBC-TV18, McGuire highlighted key factors influencing the oil market and provided insights into potential price movements.

McGuire anticipates positive news from the OPEC+ meeting and doesn't foresee additional supply cuts. He predicted a short-term price range of $83 to $84 per barrel, with the potential to reach $85 by year-end. The industry expert emphasized the impact of unexpected events on prices. Discussing the long-term outlook, he recognized uncertainties tied to upcoming US elections, Federal Reserve decisions, and inflation rates, and expected prices to range between $85 and $90 per barrel over the next 12-24 months.

Current range-bound situation

McGuire noted that the crude oil market was currently range-bound, emphasizing the significant downward pressure on the US dollar. This pressure had led to a robust bounce in crude oil prices. He suggested that the market could witness an additional gain of a few percentage points throughout the week.

"Expecting positive news coming from OPEC+ meet on November 26. We are very much range-bound at the moment. US dollar has come under significant pressure now to the downside and crude bounced up fairly strongly. I wouldn't be surprised if it gains a couple of more percent for the rest of the week," he said.

OPEC+ supply cut considerations

When questioned about the possibility of additional supply cuts by OPEC+, McGuire observed that OPEC+ was mindful of its export numbers. Given the weakness in global demand across various sectors, he did not foresee any significant additional supply cuts in the near term.

"OPEC+ is conscious as far as their export numbers. I don't see too much into an additional supply cut. They are conscious that global demand is weak across sectors. I don't see any additional supply cuts," McGuire said.

Price range in short-term

McGuire anticipated that by the end of the week, crude oil prices could touch the range of $83 to $84 per barrel. Looking ahead to the end of the year, he suggested the possibility of prices reaching $85 per barrel. However, he emphasized that unexpected events, such as supply shortages and geopolitical factors, could lead to higher prices.

"At the end of the week, prices could touch 83-84/barrel. Over the month, it could be 85/barrel. But, supply crunch and geopolitical climate, something which is unusual, but impacts the market, prices are going to be higher," he said.

Long-term outlook

Discussing the potential for oil prices to reach $80-$85 per barrel over the next 18-24 months, McGuire acknowledged the uncertainty in the long-term window. Factors such as upcoming U.S. elections, Federal Reserve decisions, and inflation rates could influence the market during this period, he said. He expressed an expectation for prices to range between $85 and $90 per barrel over the next 12-24 months.

"That is a long period of window. We have elections this time next year in the US. Fed and policy decision will come, and how inflation is going to be. Who knows what can happen during this period. Expecting $85-90 per barrel over 12-24 months," McGuire said.

Impact of FOMC Minutes on oil prices

McGuire suggested that the release of the Federal Open Market Committee (FOMC) minutes might have minimal impact on crude oil prices. He underscored OPEC's awareness of the global economic situation.

Watch the interview here:

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