Investors and analysts are trying to assess the prospects of the oil market, which came under severe impact in 2020 because of coronaries.
The price of oil, after falling to negative values can overcome a mark in 100 dollars for barrel already to the end of 2020 due to the reduction of investment in oil and gas sector, according to investors interviewed by the newspaper Wall Street Journal.
But also, it is believed that the pandemic will undermine the demand for hydrocarbon fuel and with the end of the mass distribution of the coronavirus are confirmed “the era of cheap oil”. Корреспондент.net tells details.
Oil companies “tightening their belts”
Falling to negative values at the end of April, oil prices started to recover — helped by a recovery in the economy of China and production cuts by OPEC+.
But growth has stalled amid a new outbreak of coronavirus, which threaten to erode demand for fuel.
Disputes dolgosrochnoi the development of the most important energy source in the world is difficult. The oil markets there are dozens of variables, it is difficult to predict.
Some experts believe that the market downturn will lead to changes that will set the stage for another boom: a sharp reduction in investment by oil and gas companies could return oil prices above $ 100 per barrel.
In the long term, agree most analysts interviewed by the WSJ, oil prices should be set at a level that allows the energy sector to benefit, generating enough to meet the needs of fuel.
Without oil. How to save the economy from coronaries
Thus, financial analyst holdingarea Christian Malcolm on the question of whether the increase price of oil to $ 100 over the next two years, said “absolutely”.
Investment Director London Capital Management Fund Matilda Richard Fullarton expects the price of oil exceeds $ 100 for the second half of 2020.
“The question is, do we intend to direct the capital on the extraction of oil”, — said the expert.
Investment Director, hedge Fund Capital of the Northern Trace Trevor woods believes that by 2025, despite the pressure on oil producers, the cost of oil “quite easily” could reach $ 150 per barrel.
As estimated by the International energy Agency, this year investments in oil and gas assets will be reduced by one third to 328,4 billion dollars.
The IEA notes that demand reduction on the background of the pandemic was “unprecedented.” Posklku many countries still maintain the quarantine restrictions, the demand for oil falls.
In this regard, the oil companies are cutting investment plans, in an effort to maintain their balance sheets amid falling revenue in a pandemic.
“Belt-tightening” oil companies will have long-term implications for oil production in the world, notes the analyst of JPMorgan.
The end of an era: how cheap oil could change the world
To restore oil production to a level able to cover the needs in fuel by 2030 will require additional investments in the amount of 625 billion, said Malek.
Such predictions are at odds with the futures market, which for the remainder of the decade suggests that Brent crude oil will cost above $ 60 per barrel.
However, interviewed by WSJ, analysts believe that the market overestimates the rate of rejection of the world from fossil energy sources.
The transition to “green” energy business leaders fully support this policy, however, seriously realizuetsya only in the European Union.
So, this week the European Commission announced the rejection vaustralia carbon energy and use of hydrogen as one of the most important sources of energy in the transition to clean technologies. By the way, in Brussels a strategy called a chance for Ukraine.
Analyst one of the largest financial conglomerates Citigroup Edward Morse believes that oil at $ 50 per barrel, producers will be able to produce more than enough.
His logic: technological innovations will lower production costs, and pandemic encourages people to continue to work from home and drive less and to travel, which will limit the demand for oil.
According to the analyst of Morgan Stanley Martijn rat, OPEC will keep the market under control. He says that when loomed the peak demand, Saudi Arabia and other producers of cheap oil will open the valves, but not to keep prices, and to conquer more of the market.
Unlike the experts of the oil market participants prefer to give more lenient grades. So, the Deputy head of the energy Ministry of Russia Pavel Sorokin said that the recovery in oil prices is expected at the level of 40-45 dollars per barrel in the second half of this year.
According to him, the cost will continue to grow next year, “if there are no unexpected factors”. He says it’s a fair price, and it will provide filling of oil production.