Chatfeild-Roberts: Oil at $220 per barrel is possible

Jupiter chief investment officer John Chatfeild-Roberts admits the price of Brent crude could reach $220 a barrel as Middle East unrest continues, although he believes the scenario is unlikely.

The Jupiter Merlin fund of funds head is trying to look through the current volatility of oil and gas supply and take a longer-term view and sees a raft of conflicting information emanating from the region.

His comments to Wealth Manager came before the UN's resolution to allow Western-led attacks on Libya, which have seen oil rise above $117 per barrel briefly on 18 March.

With the unrest in Bahrain continuing, and tensions remaining across the Middle East, the oil prices were back at seven day highs with Brent crude up $1.19 at $116.9 per barrel, while oil crude delivery for april moved up $1.67 to $103.09.

Chatfeild-Roberts’ team, which includes Peter Lawery and Algy Smith-Maxwell, have boosted the energy weightings in all four of their onshore portfolios, including the Citywire Selection star pick Merlin Growth fund, in the last few weeks, but he says the oil spike was not a significant factor in their decision to build their energy exposure.

The trio have added BlackRock World Mining and Guinness World Energy on the view that the global energy supply will become more important as structural demand increases over the medium to longer term.

Unrest

The call was made before the current round of unrest in Libya which, close to the $120 level many analysts believe could have the effect of tipping the global economy back into global recession.

Chatfeild-Roberts told Wealth Manager: ‘We are trying to look through the current situation but if it spreads further around the region it would have serious implications. We cannot control it and very few others are in control of [the situation.]