Baku, Azerbaijan, July 25
By Leman Zeynalova – Trend:
Political risk remains a large factor in the outcome for prices and could drive them higher, Ann-Louise Hittle, vice president, Macro Oils, at global natural resources consultancy Wood Mackenzie told Trend.
She was commenting on the possibility of oil prices reaching $150 per barrel in a short term.
“In a 20 year forecast for nominal terms, such prices are possible. Even in the shorter term, such prices could occur if an attack were to occur on a large oil facility that takes out a large volume of oil production,” said the analyst.
However, Wood Mackenzie does not see such an outcome in its base case short term forecast.
“For 2018, we are forecasting year-on-year oil supply growth of 2.2 million b/d compared with a gain in global oil demand of 1.6 million b/d which points toward enough supply to meet demand for the year,” she said.
Ann-Louise Hittle believes that political risk remains a large factor in the outcome for prices and could drive them higher, as an example, if the tensions between the US and Iran were to escalate sharply and lead to potential conflict.
Earlier, Bernstein Research said that oil prices could top all-time highs near $150 a barrel because energy companies are investing too little money in new production.
Bernstein is part of a chorus of oil market watchers, including OPEC and the International Energy Agency, warning that companies are underinvesting in the type of big, long-cycle projects that yield huge payloads of crude.
"The risk for the oil industry in reducing investment today, is creating a shortfall in oil supply tomorrow. Oil remains an essential part of our lives," Bernstein said in a research note. "Any shortfall in supply will result in a super-spike in prices, potentially much larger than the $150 per barrel spike witnessed in 2008."
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