Warning of new oil price crisis
While short-term oil prices is unlikely to go above $ 75, even the most optimistic expectations, limited investment in new projects could see the oil price increase, even over last year's high Some of the experts agree.
Over the weekend, Saudi Arabia oil minister Ali al-Naimi told delegates at a meeting in Rome that the world could be facing another oil crisis, with prices above the lap record of almost $ 150 a barrel within two to three years.
The comments recall the prediction of Goldman Sachs in May that oil could head to $ 200 in November last year.
The International Energy Agency recently predicted spending on oil exploration and future production will be reduced by up to 20% this year - double the decline that had been forecast.
Faced with declining oil prices and difficult credit markets, it is feared that the lost production this year could take years to do well.
The comments of the Saudi oil minister echoed by the International Monetary Fund, with commentators warning lowest prices and the global recession are hindering investment in new capacity.
All this makes the decision of OPEC later this week on production doubly important. Member countries say they are doing everything possible to get the oil price back to its level of $ 70 per barrel - which represented both say that their needs as the producer countries and the needs of the global economy.
But with the production forecasts for the global economy fears still seesawing between any recovery will be slow and some reasons for optimism that next year will be a return to growth, forecasts of future demand are as difficult as ever right.
Lipsky, IMF first deputy managing director, told a meeting of G8 energy ministers that "over the short term are likely to decline."
"Global demand for oil is expected to recover gradually, reflecting the prospect of a gradual recovery in global growth and excess capacity in OPEC producers has increased considerably," he said.
Jon Rigby, an analyst at UBS, said that the recent increase in oil price reflects market sentiment increasingly optimistic, not any change in fundamentals.
But agreed that current levels of oil prices are still in the range between the necessary level of support for existing production and is required to drive sufficient investment to increase productive capacity. "
Ultimately, he believes prices will move more steadily, although it was not until about the second half of 2010, when inventories have fallen and the reserve capacity begins to erode.
"The first quarter saw the bottom in oil prices, amid the worst two quarters of economic activity in modern history, then this is probably a very bullish long term signal," he adds.
Like others, we think short-term fundamentals are weak, with reserves capable of meeting the demand of about 62 days - well above the normal level of 52-54 days and think that lower prices in the short term - although probably not less than $ 40.
Naimi said the downbeat forecasts from some major agencies are too cautious and expects oil to rise to $ 75 a year.
Many analysts believe the petroleum oil in an average of $ 70-75 next year and an increasingly concerned that oil prices can go forward as the bears suggest that the global recovery - and hence the demand for oil - will be slow.
The bulls, however, think the fall in supply will not meet the recovery of demand and oil prices could surge.
This is why OPEC, Naimi urged to "stay the course" when it meets this week, despite the growing evidence that members are not complying to the lower production targets that were set in January.
[Source]
Over the weekend, Saudi Arabia oil minister Ali al-Naimi told delegates at a meeting in Rome that the world could be facing another oil crisis, with prices above the lap record of almost $ 150 a barrel within two to three years.
The comments recall the prediction of Goldman Sachs in May that oil could head to $ 200 in November last year.
The International Energy Agency recently predicted spending on oil exploration and future production will be reduced by up to 20% this year - double the decline that had been forecast.
Faced with declining oil prices and difficult credit markets, it is feared that the lost production this year could take years to do well.
The comments of the Saudi oil minister echoed by the International Monetary Fund, with commentators warning lowest prices and the global recession are hindering investment in new capacity.
All this makes the decision of OPEC later this week on production doubly important. Member countries say they are doing everything possible to get the oil price back to its level of $ 70 per barrel - which represented both say that their needs as the producer countries and the needs of the global economy.
But with the production forecasts for the global economy fears still seesawing between any recovery will be slow and some reasons for optimism that next year will be a return to growth, forecasts of future demand are as difficult as ever right.
Lipsky, IMF first deputy managing director, told a meeting of G8 energy ministers that "over the short term are likely to decline."
"Global demand for oil is expected to recover gradually, reflecting the prospect of a gradual recovery in global growth and excess capacity in OPEC producers has increased considerably," he said.
Jon Rigby, an analyst at UBS, said that the recent increase in oil price reflects market sentiment increasingly optimistic, not any change in fundamentals.
But agreed that current levels of oil prices are still in the range between the necessary level of support for existing production and is required to drive sufficient investment to increase productive capacity. "
Ultimately, he believes prices will move more steadily, although it was not until about the second half of 2010, when inventories have fallen and the reserve capacity begins to erode.
"The first quarter saw the bottom in oil prices, amid the worst two quarters of economic activity in modern history, then this is probably a very bullish long term signal," he adds.
Like others, we think short-term fundamentals are weak, with reserves capable of meeting the demand of about 62 days - well above the normal level of 52-54 days and think that lower prices in the short term - although probably not less than $ 40.
Naimi said the downbeat forecasts from some major agencies are too cautious and expects oil to rise to $ 75 a year.
Many analysts believe the petroleum oil in an average of $ 70-75 next year and an increasingly concerned that oil prices can go forward as the bears suggest that the global recovery - and hence the demand for oil - will be slow.
The bulls, however, think the fall in supply will not meet the recovery of demand and oil prices could surge.
This is why OPEC, Naimi urged to "stay the course" when it meets this week, despite the growing evidence that members are not complying to the lower production targets that were set in January.
[Source]
