CEOs of some of the world’s largest oil companies, speaking at the Qatar Economic Forum, said crude oil prices are likely to continue to rise due to lack of investment.
The heads of some of the world’s largest oil companies said crude oil prices are likely to continue to rise because a lack of investment will reduce future supply.
CEOs of Royal Dutch Shell Plc and TotalEnergies SE teamed up with major commodity traders and banks to predict that oil could reach up to $ 100 a barrel, though they also said volatile markets could push back the prices.
The lack of investment “will exacerbate the rigidity of supply and demand as economies recover, and over time we will see supply recover and rebalance,” Exxon Mobil Corp. CEO said on Tuesday. Darren Woods, at the Qatar Economic Forum. But it is likely that “in the short term, prices will be higher.”
Trafigura Group trading house said oil could top $ 100 a barrel next year. Bank of America Corp. also predicted this week that prices could rise to that level and Goldman Sachs Group Inc. he said he doesn’t rule it out. Oil has risen 44% this year as widespread vaccines increase mobility and increase demand. Brent benchmark crude traded slightly at 2:55 p.m. in New York at $ 74.90 a barrel.
World oil markets had one of the most turbulent years in history last year with falling prices for the coronavirus pandemic. But economies in the West are growing again, the roads of Europe and the United States are starting to fill up and more Americans are flying. While this could drive up prices in the short term, the energy transition means oil consumption could start to be high and eventually decline in the long run.
The energy change means there has not been enough investment in oil and gas projects and this could drive up prices, Qatar energy minister Saad al-Kaabi said at the same event. BP Plc CEO Bernard Looney said Tuesday earlier that the rise in crude oil is helping the company’s energy transition plans and generating better cash flows and profitability for shareholders.
There are “many chances” of reaching $ 100 a barrel, “but we could see low prices again in the coming years,” said Patrick Pouyanne, CEO of TotalEnergies. “We’ve gotten used to volatility.”
The Qatar Ministry of Trade and Industry, the Qatar Investment Promotion Agency and Qatar Media City are subscribers to the Qatar Economic Forum, promoted by Bloomberg.
(Oil price updates in the fourth paragraph.)
–With the assistance of Verity Ratcliffe.