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Pierre Andurand, a commodities trader, has seen one of his fund soar 109% through the first three months of the year, after sensational gains in both 2020 and 2021 as well.

He’s not a permabull, either, having bet that oil prices could go negative, a prediction that came to fruition in 2020. But he’s incredibly bullish now, saying prices could reach $200.

Russian oil, he says, won’t be available to global markets for some time, even if the country can reach a peace deal with Ukraine. “So for me, it’s not only about the ceasefire, but I still think that the sanctions will stay on Russia until the West can feel like they can trust them and that they will not go attack another neighbor like a few months later or attack NATO countries,” he told the Odd Lots podcast from Bloomberg. “I mean, you can’t go from being scared of them, you know, using nuclear strikes and using chemical weapons and biological weapons to suddenly negotiate and give them money again.”

Even though it’s only the U.S. and U.K. officially boycotting Russian oil, reputational risk, as well as a lack of insurance and credit, is keeping other buyers away, he says.

Of the 4 million barrels a day lost from Russian production, he says Gulf countries can replace 1.5 million. Western countries can tap their strategic reserves to fill the rest, but will run out after about 2.5 years. At $200 per barrel, Andurand said demand could fall to balance the market. Directly asked if oil could reach that level this year, he replied that it could.

“The fact that maybe to have the same impact on the economy at the high price of 2008, when it was $150, might be actually closer to $250 today. So that’s the way I think of it,” he said.

The West Texas intermediate grade of oil CL.1, +0.43% was trading above $104 on Friday, and the lead Brent contract BRN00, -0.08% was trading near $108.

Source: This post first appeared on http://marketwatch.com/

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