KUALA LUMPUR: The global crude oil is expected to be trading between US$60 per barrel and US$87 per barrel level this year, attributed to geopolitical risk, higher demand in oil and gas (O&G) and weaker US dollar.

Earlier this morning, international benchmark Brent crude oil hit fresh high at US$69.28 per barrel and traders predict it to surpass US$70 per barrel in the near future.

IQI Global chief economist Shan Saeed said the global demand for O&G likely to reach 98 million per barrel daily in the third quarter (Q3) of 2018 on the back of improved business activities.

Three years ago, the global demand of O&G was at 93 million per barrel daily.

“Developed and emerging markets in Asia and Asean businesses are improving, which require them to increase the energy demand to further drive their businesses.

"Countries like China, Korea and Japan contribute about 57 per cent of the global import of liquefied natural gas (LNG),” he told NST Business today.

He said cold climate in North America increases the demand of O&G, citing that the weather patterns are changing that make the energy dearer.

“The demand from US and Canada also growing as the northern region’s weather is intensely cold,” he said.

Shan said the improved oil prices would also trigger O&G players to adjust their capital expenditure (capex) mainly in human resources recruitment and O&G exploration expansion activities.

“Many companies did not realise the oil prices would go up. Previously, a lot of workers have been laid off. Now, these companies would want to keep up the sustenance level as a result of improved oil prices,” he added.

Shan said the tense political situation in the Gulf region such as the conflict between Saudi Arabia and Yemen; and the recent declaration of Jerusalem as Israel capital have put the regions stability in jeopardy.

“Geopolitical risk in the Middle East likely to affect the production and supply of O&G as the region produces about 40 per cent of the global oil production,” he said.

He added the diplomatic row between Pyongyang and Washington would also impact the global O&G production and supply, citing that the US is among the global oil producer.

“Relationship between US and North Korea is heading for quagmire, which requires diplomatic brinkmanship,” he said.

Shan said the US economy is still struggling to keep up a three per cent growth in gross domestic product (GDP) due to the productivity issue.

“Technology is making huge impact across all industries including oil and gas, manufacturing, service, medical and legal profession in order to stay relevant and increase productivity.

“30 per cent of Americans are jobless as the economy is moving towards robotic and automation as well as artificial intelligence (AI) which reduces human workforce.

“Technology is providing opportunities as well to move ahead faster in terms of economic growth for many tech savvy countries,” he said.

Hence, he said US President Donald Trump decided to keep the dollar weaker in short-term in order to rejuvenate the economy.

He continued that whoever takes lead in AI, would control the global economy.

“China is the new global and economic power. President Xi Jinping is leading from the front,” he said.

Meanwhile, he said Malaysia’s economy is moving ahead to become the 25th largest economy with GDP size hovering around US$1.5 trillion by 2030 surpassing Singapore.

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