Many current mainstream headlines are talking about the effect of low prices on the oil industry. However, dig a little deeper into the news and there are many indications the oil and gas market is about to pivot in a completely new direction, a welcome change in course.
MercBloc President Dan Dicker sees higher prices ahead. He predicts that supply will come down as demand picks up. “The IEA expects all the production in the US to go down half a million bbls in the next year, 500 000 bpd. I expect it to go down a million bpd in 2016 and another 1 million bbls in 2017," he said. "On top of that, I see demand increasing by another 2 million bbls over the next 2 years. So that's already a 4 million bbl swing over the next 22 months. That's going to make a difference with oil prices."
Industry talk has been quietly gathering momentum about a coming oil price spike. More and more analysts are saying OPEC (the Organization of Petroleum Exporting Countries) can no longer sustain its ongoing price war and that member nations have begun feuding amongst themselves. In addition, increasing industry watchers are forecasting a coming rise in crude price, ranging from US$80 a bbl next year to as high as US$130 by 2017.
“The net result of all this news is that the enhanced oil recovery (EOR) market could soon get a strong boost,” said FTTN CEO Sydney Jim. “If and when prices rise, that will make EOR a much more attractive option for bringing declining fields back to productive life. And as EOR offers a quicker payoff than wildcat drilling, we expect a dramatic upturn in activity as soon as a recovery takes hold. If our plans bear out, we will be entering this promising market at the most opportune time, ready to take advantage of the upswing.”A recently released report has forecasted the EOR market to grow at a robust 16.9% rate between now and 2019.
Adapted from press release by Francesca Brindle
Read the article online at: https://www.hydrocarbonengineering.com/refining/25112015/oil-prices-suspected-to-rise-again-1803/