CEOs of some of the world’s largest oil companies, speaking at the Qatar Economic Forum, said crude prices are expected to continue to rise due to a lack of investment.
The bosses of some of the world’s largest oil companies have said crude prices are expected to continue to rise as a lack of investment will reduce future supply.
The CEOs of Royal Dutch Shell Plc and TotalEnergies SE have joined with major commodity traders and banks in predicting oil could hit $ 100 a barrel, though they also said volatile markets could push prices back down. .
The lack of investment “will exacerbate the tightening of supply and demand as economies recover, and then over time we will see supply recover and rebalance,” said the CEO of Exxon. Mobil Corp. Darren Woods at the Qatar Economic Forum on Tuesday. But “in the short term, possibly higher prices” are more likely.
Trading house Trafigura Group has said oil could surpass $ 100 a barrel over the next year. Bank of America Corp. also predicted this week that prices could climb to that level and Goldman Sachs Group Inc. has said it is not ruling it out. Oil has climbed 44% this year as widespread immunizations increase mobility and boost demand. Benchmark Brent crude was little changed at 2:55 p.m. in New York at $ 74.90 a barrel.
Global oil markets experienced one of the most turbulent years in history last year with the coronavirus pandemic causing prices to plummet. But Western economies are growing again, roads in Europe and the United States are starting to fill up, and more Americans are flying. While this may push prices up in the short term, the energy transition means that oil consumption could start to level off and possibly decline in the longer term.
The energy shift means that there has not been enough investment in oil and gas projects and this could drive up prices, Qatari Energy Minister Saad al-Kaabi said at the same event . BP Plc CEO Bernard Looney said earlier Tuesday that the rise in crude is helping the company’s energy transition plans and generating better cash flow and returns for shareholders.
There is a “good chance” of reaching $ 100 a barrel, “but we could see low prices again in the years to come,” said Patrick Pouyanne, CEO of TotalEnergies. “We are used to volatility.
The Qatar Ministry of Trade and Industry, the Qatar Investment Promotion Agency and Media City Qatar are the underwriters of the Qatar Economic Forum, powered by Bloomberg.
(Updates with the price of oil in the fourth paragraph.)
–With help from Verity Ratcliffe.