The CEOs of some of the world’s largest oil companies said in a speech at the Qatar Economic Forum that crude oil prices may continue to rise due to lack of investment.
The bosses of some of the largest oil companies in the world said that crude oil prices may continue to rise because a lack of investment will reduce future supply.
The CEOs of Royal Dutch Shell and TotalEnergies SE, together with major commodity traders and banks, predicted that oil prices could reach as high as $100 a barrel, although they also said that market volatility may depress prices again.
Exxon Mobil CEO Darren Woods said at the Qatar Economic Forum on Tuesday that the lack of investment “will exacerbate supply and demand tensions as the economy recovers again, and then we will see supply rebound and rebalance in time”. But “in the short term” “Internal prices may be higher” is more likely.
Trafigura Group, a trading company, said that oil prices may exceed $100 per barrel next year. Bank of America also predicted this week that prices may jump to that level, and Goldman Sachs said it would not rule out this possibility. As widespread vaccinations have increased liquidity and stimulated demand, oil prices have risen by 44% this year. The benchmark Brent crude oil barely changed at 2:55 pm in New York, at $74.90 per barrel.
Last year, the global oil market experienced one of the most turbulent years in history, when the coronavirus pandemic caused prices to plummet. But the western economy is growing again, the roads of Europe and the United States are beginning to fill up, and more and more Americans are flying. Although this may push up prices in the short term, the energy transition means that oil consumption may begin to level off and eventually decline in the long term.
Qatar’s Energy Minister Saad al-Kaabi said at the same event that energy transfer means insufficient investment in oil and gas projects, which may push up prices. BP Plc CEO Bernard Looney said earlier on Tuesday that rising crude oil prices will help the company’s energy transition plan and bring better cash flow and returns to shareholders.
Patrick Pouyanne, Chief Executive Officer of TotalEnergies, said that it is “very likely” to reach $100 per barrel, “but we may see some low prices again in the next few years.” “We are used to volatility.”
The Ministry of Industry and Commerce of Qatar, Qatar Investment Promotion Agency and Qatar Media City are the underwriters of the Qatar Economic Forum, supported by Bloomberg.
(The fourth paragraph of oil price update.)
– With the help of Verity Ratcliffe.