Soaring global oil prices are not expected to exceed US$100 per barrel despite worries over supply disruptions caused by conflicts in exporting countries, says national oil and gas conglomerate PTT Plc.
Conflicts in several regions have made some oil traders uneasy, including a dispute between Russia and Ukraine, an attack by Yemeni rebel groups on the United Arab Emirates and a row between Iraq and Turkey.
If the situations do not escalate, global oil prices should stand between $80 and $90 per barrel, said Auttapol Rerkpiboon, chief executive and president of PTT.
He said this range reflects a "balance" between oil supply and demand in the global market, following the reopening of many countries to jump-start their economies late last year. If these conflicts cannot be controlled, "we may see oil prices soar to $100, but that will only last for a short time", said Mr Auttapol.
PTT is in agreement with other Thai oil firms forecasting global oil prices.
Last week Chatapong Wungthanagorn, executive vice-president of Thai Oil Plc, Thailand's largest oil refinery by capacity, said a more realistic price is $80 a barrel, with an occasional rise to $85.
He believes global oil supply will soon increase as problems that affected oil production in Kazakhstan, Libya and Nigeria ease.
Additional oil supply can also come from producers drilling from oil shale rock fragments in North America.
North American producers may pump up production if prices become more attractive, staying above $90, Praipol Koomsap, a Thammasat University economist and former assistant to the energy minister, said earlier.
Shale oil production, usually done on a small scale under budget constraints, is costly and has been suspended for many years, but production may resume if high oil prices guarantee handsome profits.
In an effort to deal with volatile oil prices, PTT diversified into upstream and downstream petrochemical industries as well as ventured into applications for life sciences and electricity-related businesses, including a plan to produce electric vehicles.
Non-oil businesses have a higher profit margin than oil sales, said PTT.
In another development, an oil leak from an undersea pipeline off Rayong's coast was brought under control on Tuesday, following an emergency response meeting between the government and the private sector. Emergency teams were deployed to clean up the oil spill, said Star Petroleum Refining Plc, a refinery unit of US-based Chevron Corp. The pipeline belongs to Star Petroleum Refining.
