“Lower for longer” just became lower for even longer..

“Lower for longer” just became lower for even longer..
22 November, 2016 Rene Palne
In News

A new major US discovery, effectively puts a lid on any future oil price increases above the level of 60 $/bbl.
Even before this discovery, a return to an 80-100$ oil price scenario seemed unlikely in the foreseeable future, especially as OPEC will not be willing to cut their production only to see big growth in US production as prices increase. Therefore this new discovery effectively extended the “lower for longer” scenario to a lower for even longer.. The market will be flooded with US oil when prices reaches +60 $/bbl. leading to subsequent increased downward price pressure.

The UEA Minister of Oil & Energy announced at ADIPEC a few weeks back, that uncontrolled growth in US production, will be followed by STRONG reactions, leading US producers to “burn their fingers again”. Though as we all know the US market is not driven by a cartel that can manage output, the US is driven by RoI (Return on Investments), therefore we expect to see more volatile prices and shorter up/down cycles going forward.

Transforming your cost base and optimising your asset portfolio is therefore more important than ever – contact us to for a talk on how we can support you in the process.

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