Brent and WTI crude prices: HSBC chief executive Stuart Gulliver predicts oil will settle between $25 and $40 in a year’s time
HSBC chief executive Stuart Gulliver expects oil to settle between $25 and $40 in on year's time, he said today.
Responding to a question about where the prices will be this time next year at the annual Asia Financial Forum in Hong Kong, Gulliver said: "Major producers are currently delivering 2m-2.5m barrels per day more than demand, so the question is how long they can continue to overproduce for at that level."
Concern that lifting Western sanctions on Iran will exacerbate the supply glut sent oil to new historic lows today. Yesterday, Iran warned it was ready to increase its exports by 500,000 barrels per day.
Brent crude, the international benchmark, fell as low as $26.67 a barrel, its lowest since 2003. The price of West Texas Intermediate, the US benchmark, also fell below $29 a barrel to $28.71.
Gulliver also reiterated his view China's economy isn't approaching a so-called hard landing, when a country's slowing growth results in widespread corporate defaults and economic collapse.
He had made a similar comment in October, despite mounting concern over the world's second largest economy in the wake summer's stock market turbulence.
Gulliver expects China's economy to grow 6.7 per cent this year, in line with official estimates but higher than forecasts by many economists.
"We do think the data are accurate, we think any errors in the data are compensated for by the fact a lot of the service economy is not included [in the numbers]," he said.