Crude oil in the low $70s a barrel could soon feel like a bargain.
The Oil Price Information Service’s Tom Kloza recently estimated that prices could surge another 10 percent this summer — a rally that could hit consumers at the gas pumps.
“We can get into the $80s for Brent again, and I think we could get to $80 for WTI,” the firm’s global head of energy analysis said on CNBC’s “Futures Now.”
Kloza, who accurately called the 2015 oil collapse, reiterated his bullish case for oil three days after the commodity hit its highest price since 2014. However, he rolled back the odds of an oil shock to $100 this year.
“The chances of that are probably as good as the chances of Jessica Alba calling me for her next barbecue,” Kloza joked. He added there is a reasonable — albeit unlikely — chance Brent could reach $90 a barrel on geopolitical events in places like Libya, Nigeria and Venezuela.
‘Apocalyptic gas prices’
Kloza’s thoughts came last Thursday as he was giving “Futures Now” an exclusive look at research coming out this week that holds predictions for 2018’s second half.
According to the note, the odds are 50/50 that the nationwide average for unleaded gasoline will return to $3 a gallon or higher before the end of summer. He cited a hurricane slamming into the Gulf Coast as a leading bullish catalyst rather than a conflict between the United States and Iran.
“You would have to have a naval blockade to really cut out all of Iran’s 2.5 million barrels a day,” Kloza said. “I know we can sometimes stretch what the administration is capable of doing. But I think they’re pretty prudent in an election year. They don’t want to have apocalyptic gasoline prices.”
Yet, he expects it’ll still be a costly year.
“We’re going to spend about $50 billion more as a country on gasoline than last year.” Kloza said. “It’s still cheap compared to those Arab spring and Iranian sanctions of years 2011 to 2014. But $50 billion is a lot of change.”
