Crude oil prices may reach $100 soon: Mukesh Ambani

Mukesh Ambani, chairman of Reliance Industries Ltd, today said crude prices could rise to $100 a barrel soon due to decline in refining growth and sluggish market.

“Crude oil prices are well above the $70 mark. We foresee an increase in crude price to three digits in the near future and have to be actively prepared for it,” Ambani said at an international conference on petrochemicals here.

“We have to be prepared for a higher energy price than in the last two decades -- $80 to $100 is the norm.”

Ambani’s statement comes at a time when OPEC (Organisation of the Petroleum Exporting Countries) daily basket price stands at $78.43 per barrel. Besides, OPEC’s secretary general, HE Abdalla Salem El-Badri, at the Arab Energy Conference, held during May 9-12, observed: “The more reasonable price levels we see today support investment to provide the much-needed future production capacity. Shelved projects are now being restarted, there is a noticeable rise in activity and in general, there is a more optimistic mood than a year ago. It means we can now return to focusing our attention on the important longer term energy challenges.”

According to the RIL chairman, India is poised to become the world’s strongest economy by 2020. “I believe by 2020, the balance-sheet of India would be the strongest in the world. The GDP growth of India from $1.5 trillion to $5 trillion in the next ten years will make India an economically powerful country in the world,” Ambani said. He said this century belonged to India as businesses were shifting to India from other parts of the world.

On the economic front, he said the Asian region was far more stable than the US and Europe and he didn’t see overcapacity constraints in the downstream sector.

“Almost 40 per cent population of the world belongs to India and China and this will create a paradigm shift. Both India and China will create a huge demand as consumption of these countries will reach new heights. Thus, India is going to be a major manufacturing hub as consumption will increase,” he said.