Skip to comments.Shell Sees Stable Oil Price for 20 Years With Volatility Bursts
Posted on 02/13/2014 11:21:24 AM PST by ckilmer
Royal Dutch Shell Plc., Europes biggest oil company, said crude prices would on average probably remain at current levels or rise steadily for the next two decades, with periods of volatility.
(Excerpt) Read more at moneynews.com ...
Brent oil averaged more than $100 a barrel for the past three years, tripling from its 2008 low as the world economy recovered from the financial crisis.
In Shells tighter supply scenarios, crude prices could steadily increase over the next 20 years, while still going through periods of volatility that could see Brent falling to $70 a barrel, Bentham said.
While oil companies are cutting their investment plans to strengthen returns amid falling profitability, spending reductions are not the most important factor influencing the oil price, Bentham said. Increased Iranian exports as sanctions are lifted, Iraqs ability to boost its production and Libyas capacity to limit output shutdowns are factors bigger in totality than the trimming of the investments, he said.
The possibility of weakening demand growth in emerging markets may be offset by a strengthening U.S. economy, he said.
Economic development and particularly in the emerging nations, is the biggest driver of demand change, Bentham said. That has an important impact on the commodity prices.
Can you say: “Supply and Demand?”
I don’t consider this ‘prediction’ going out on a limb exactly.
“I dont consider this prediction going out on a limb exactly.”
.....crude prices would on average probably remain at current levels or rise steadily......
Yeah, that’s really making a bold statement, ain’t it.
Too many things impact it that are way beyond reasonable predictions, wars, changes in technology, competing technology, etc.
What should be understood by the reader of long-term oil forecasts is that this only holds if nothing else changes, and that impacting change in a 20 year period is near certainty.
Shell often has trouble predicting its own earnings and is among the most ‘surprised’ when its forecast is off big time. Maybe they should become a spokeman for ‘climate change’ as they are in the same faux forecast league.
oil and gas prices fluctuate when needed ... the need being to oust an unfavorable American administration
agree. Rising demand for energy however is as near a certainty as you can get. However, the rising cost of getting oil is inviting competitors in transportation like natural gas and electricity. we’ll see.
shell put out a graph a couple months back which showed they expected oil demand to rise until 2030 and then shrink there after.
I think what shell is talking about currently is that there is a steadily rising demand for oil as a transportation fuel with nothing ready to supplant it. even in the face of rising US supply—the world’s ability to keep up with demand will barely be enough. I think what has been freaking out the majors (oil companies like exxon shell chevron) recently has been graphs floating around—I can’t find them right now. but the graphs show how much it cost to extract new oil in the 1990’s vs the last 5 years. the price difference is pretty staggering. I don’t know whether this is an oil majors problem or an industry problem. certainly the oil majors have not been major beneficiaries of the US fracking revolution—though they have been able to buy their way into new positions recently.
However the high price of oil invites competitor transportation fuels—like natural gas for trucks and buses and electricity for cars. Both have seen double and triple digit growth in the last two years. Since that growth comes off a small base — its not meaningful now and even at high rates of growth —won’t be meaningful until at least sometime in the 2020’s.
Further it will take at least five years for US fracking technology to make for meaningful volume oil/natural gas production overseas. But that is coming. The chinese have recently announced the discovery of a giant natural gas field. There are countries all over the world with big shale gas & oil deposits. some will be more costly to extract than others.
here is an argument for lower oil prices sometime in the next couple of years because of a large economic downturn in China.