Oil prices traded lower Tuesday morning and saw heavy selling pressure last week. With the price of WTI hovering around the $67 mark, the upside case for $100 a barrel still can't be ruled out, according to Helima Croft, global head of commodity strategy at RBC Capital Markets.
What Happened
While the case for $100 oil isn't necessarily a "base case" scenario, there is a path for the commodity to reach the higher level, Croft told CNBC last week. Oil could move notably higher if a series of geopolitical events play out, including an ongoing collapse in Venezuela's oil market — a scenario that's nearly a "given," she said.
Iran's government could further shock the oil market by officially withdrawing from the nuclear agreement and making it clear it wishes to restart its nuclear program, she said. Doing so would create a "whole new risk environment" in the Middle East.
Why It's Important
These two events alone represents potential catalysts to move oil "significantly higher" from current levels. Other factors in play include "fears of a trade war" between the U.S. and China and the situation with North Korea is at best "sort of contained," Croft said.
What's Next
If oil prices surge to the $100 level, it would present a new set of challenges for oil dependent countries like Russia, Bob Parker, an investment committee member at Quilvest Wealth Management, told CNBC Europe on Monday. A spike to the $100 level would likely be followed up with a "generalized global downturn" after finally "clearing this industry overhang" of low oil prices for a long period of time, he said.
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