Page 5 - Oil&Gas-AustralAsia-2015-Issue-4
P. 5

Who will be right on when the Oil Price
will rise sharply again

Every day of the week you can read a different prediction on A survey of 13 investment banks by The Wall Street Journal cut
when the price of Oil will rise and to what level it will settle at. their average forecast for Brent crude, the international price
Certainly there have been project cancellations and delays due to gauge, by $9 to $58.70 a barrel, compared with last month’s
the current state of the market. survey. For West Texas Intermediate, the U.S. oil marker, the
Energy consultancy Wood MacKenzie has warned that around average forecast is for $54.40 a barrel, also down $9 from August.
$1.5 trillion worth of oil projects and large undeveloped areas The big question is how much production needs to be cut in
of US shale are unprofitable at current price levels. Analysts order for the prolonged oil price slump to come to an end?
are concerned that the scale of cutbacks in the industry could It’s predicted that just half a dozen new projects will be approved
eventually leave it exposed should demand pick up over the next this year and 10 or 11 in 2016, compared with an annual average
three years. of 50 to 60. North American production in particular will be hit,
Wood Mackenzie said: “While operators are seeking an as flexible shale drilling has reacted fastest to the market collapse.
average cost reduction of 20-30pc on projects, supply chain That suggests OPEC has scored a victory of sorts by maintaining
savings through squeezing the service sector will only achieve its own output to retain market share.
around 10-15pc on average.” Only time will tell as to when the Oil Price will rise sharply again,
As for price predictions, many aanalyst’s are predicting that crude the truth is nobody really knows for sure.
is set to stay below $60 a barrel through next year as the market
struggles to recover from a supply glut. Mike Twiss

   1   2   3   4   5   6   7   8   9   10