Crude oil may reach $130 per barrel soon: Peter McGuire of XM Australia

Brent crude oil touched $118 on March 3 amid fear of supply chain disruption from Russia, the third-largest producer of oil (Representative Image)

Fears about larger sanctions against Russia by the West and supply worries have pushed up crude oil prices higher, taking them close to eight-year highs. Brent crude, the global oil benchmark, surged to $118 a barrel on March 3, its highest level since June 2014.

Concerns about production constraints and potential disruptions in Russian supplies drove up oil costs.

Peter McGuire, CEO of XM Australia, while discussing the issue of rising crude prices told CNBC-TV18 that there is uncertainty in the oil market now.

On whether he is anticipating crude oil price going further high as Russia-Ukraine tensions escalate and OPEC supply assurances not having an effect on the prices at the global markets, McGuire said there is immense volatility due to chaos in the physical markets.

The rise, according to him, would continue to drive volatility in the days ahead. "Crude prices are going to be extremely volatile from now on," McGuire added.

The Brent crude prices could overshoot to $125 a barrel in the near time and may even hit $130, according to McGuire.

"Due to uncertainty, oil price may go up to $125 per barrel and even $130 per barrel. Supply disruptions in the short term can create more uncertainties" he said.

The group comprising the Organization of the Petroleum Exporting Countries, Russia and allied producers (OPEC+) agreed on March 2 to continue with their plans for a minor increase in output in April, even as there is more demand for supply of oil.

As of now, a series of Western sanctions on Russia do not include oil and gas, but the US is planning to impose sanctions on energy flows going forward.

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