Rocky Road Ahead For Crude, Says Peter McGuire As OPEC Extends Supply Cuts

It seems to be a "very rocky" road ahead for the crude market as far as price, which is edging higher on extended production cuts, XM Australia's Peter McGuire said on Wednesday.

Oil held near its highest levels since November after OPEC+ leaders Russia and Saudi Arabia announced they would extend supply cuts till the end of this year.

Analysts' views point towards crude prices hitting the psychological barrier of $100 per barrel in September, McGuire, the chief executive officer of the trading platform, told BQ Prime.

"You've got to also look at seasonality demand, any issues as far as hurricane to impact the U.S. side of things as far as production," McGuire said. "You've got to be saying that probably a $100 [per barrel] is very achievable."

"I don't know whether it's going to take out that in September but many analysts are now talking, that's very achievable this month," he said.

While crude prices have let off some of the steam so far, Brent is still above $90 a barrel, while WTI is just shy of $87 a barrel, he said during an early-morning conversation.

Upward Pressure On Inflation 

"This doesn't bode well for consumers. You'll probably see considerably higher prices over the next month or two," McGuire said. With geopolitical concerns on the rise, if the U.S. is forced to refill strategic petroleum reserves, then that will be at "very, very high prices and that's that won't go well from a price point perspective".

Rising fuel prices could kick up inflation levels again, McGuire said. "You need energy prices at $60 or $70 a barrel or cheaper to really contain inflation and the central banks are sitting on their hands at the moment."

"If you start to see energy prices ratchet up and stay at these sort of levels, then that's going to greatly impact inflation," he said.