Brent prices to plummet in coming decades

Oil&Gas Materials 10 January 2020 15:19 (UTC +04:00)

BAKU, Azerbaijan, Jan.10

By Leman Zeynalova – Trend:

The real price of Brent will fall to $45 per barrel (in 2018 prices) by 2050, down from around $60 today, Trend reports citing UK-based Capital Economics research and consulting company.

“In the next decade, we expect steady increases in shale oil production in the US. Supply will become more responsive and OPEC will continue to lose its pricing power,” said the company.

However, in the second half of the forecast period of 2050, Capital Economics sees the re-emergence of OPEC, and especially the Gulf producers, as the principal source of supply. “As they are by far the lowestcost suppliers, the Gulf countries will be able to continue to produce even within a world of falling demand and real prices. Moreover, these countries will be keen to ramp up output to prevent oil reserves being left in the ground. “

Declining demand, ample output and lower marginal costs should all put downward pressure on oil prices, the company said in its report.

“We estimate that the real price of Brent will fall to $45 per barrel (in 2018 prices) by 2050, down from around $60 today.”

In contrast, the company analysts think growth in the green economy will support global demand for copper over the forecast period and more than offset the negative impact of slower, and more services-intensive, growth in China (the largest consumer by far).

“Both renewable energy and electric vehicles are copper intensive. At the same time, the current project pipeline for copper mine supply looks thin, pointing to higher prices over the next decade. In the longer term, supply should pick up to meet demand and real copper prices will start to ease back.”


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