Crude Oil Will Not Hit $100 bbl Anytime Soon
$OIL
Higher Crude Oil prices do not always benefit producers or consumers, says Abdullah Bin Hamad Al-Attiyah, Qatar formal Energy Minister.
Speaking at the launch of his foundation, former Qatar energy minister Abdullah Bin Hamad Al-Attiyah said that higher prices don’t necessarily benefit producers or consumers.
“I always believed, based on my knowledge of the market, that prices in the hydrocarbon industry go in a cycle, they never stay high or low for a long time. In my years in the industry, I saw cycles lasting an average of 15 years,” he said.
“For the last 10 years the oil price was high because India and China entered the market, as big industrial nations, with very high demand. And they bought huge volumes.
“But because prices go in a cycle, I don’t see the Oil price rising to $100 a barrel again anytime soon. We should forget that level of prices for the time being,” he added.
Crude Oil prices are currently hanging around 50 bbl after touching highs of 114 bbl in June last year. The slump is mainly because of increased shale Oil supply from the United States and decreasing demand from countries such as China.
“Producers in my experience need a reasonable price for their product and a healthy customer. The debate on price indexation will continue because consumers never had a clear stand on it. When the price is low they want oil indexation, but when the price goes up they change their minds,” said Mr. Al-Attiyah.
He stressed the need for dialogue between producers and consumers to ensure stabilization and avoid shocks in the Oil & Gas markets.
“Producers need to know what the demand forecasts are going to be so they can make the right investments and consumers need to know if there is adequate supply…I believe that the traditional confrontation between them should be left in the past.
“We should not waste time blaming each other and should seek solutions to ensure security of supply, stability of prices and the curtailment of greenhouse gas emissions,” he added.
In a report earlier this year Standard Chartered (LO:STAN) cut its forecast for average Y 2015 Brent Crude Oil prices to 54 bbl.
“We do not expect prices to rally strongly until supply-side dislocations become much more visible,” it said.
“The main supply-side tightening will likely come later, in mid-2016 and beyond, due to the lagged effect of Capex costs on non-OPEC supply.”
Energy ministers from across the Gulf Cooperation Council (GCC) countries have expressed optimism about Crude Oil prices recovering in Y 2016.
By Aarti Nagraj
Paul Ebeling, Editor
HeffX-LTN
The post Crude Oil Will Not Hit $100 bbl Anytime Soon appeared first on Live Trading News.