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BP expects 25 % lower oil prices after period of volatility

BP plans on oil prices 25 % below current levels after short volatility period, their CEO said.

BP expects 25 % lower oil prices after period of volatility BP expects 25 % lower oil prices after period of volatility


London, October 11 - Neftegaz.RU. BP plans on oil prices 25 % below current levels after short volatility period, Bob Dudley said on October 10. The CEO of BP made the comments during a presentation at the Oil & Money Conference where he focused his speech on renewables, stressing that despite their fast projected growth to one-third of the world's energy consumption by 2040, oil & gas have a crucial role to play to take care of the remaining two thirds, UPI reported.

 

BP is assuming crude oil prices may reach levels of $60 to $65 per barrel, or about a quarter off from current levels, after a short-lived period of «extreme volatility», in part as supply-demand fundamentals not only show a balance but also because major disruptions could only cause dislocation for a while.

 

«We're very disciplined in our company, really disciplined with our capital spending and we will continue to be, and not planning on an $80 future. We're planning on a cycle of $60-$65. It's a bit up from the $55 we said last year,» said Bob Dudley, according to a report by S&P Global.

 

In other comments on the sidelines of the presentation, he explained that current oil prices are only likely to remain high for a period of extreme volatility - caused by Iranian oil sanctions and concerns about Venezuela that will not last long.

 

The U.S. has tools to control potential Iranian oil supply declines through waivers it may grant as nuclear program-related sanctions are scheduled to be restored on Nov. 5, and even a disruption in Venezuela would only cause «dislocation» for a while, Dudley told CNBC.

 

Saudi Arabia has additional capacity and Russia is also increasing capacity, he added. In the case of Venezuela, «it may be a dislocation for a while, you got the Permian (...) within a year that will also bring additional supplies.»

 

According to EIA forecasts, the U.S. will increase output to 11.7 million barrels per day next year compared with 10.7 million this year due to Permian basin production coming online.

 

He quoted the IHS Markit Vice Chairman Daniel Yergin saying in an analysis of the current volatility that «actually the markets appear to be in balance, but emotionally not stable. I think that is playing into the markets,» Dudley said.

 

Source : Neftegaz.RU