OPEC Secretary-General Abdalla El-Badri believes the oil price will rise to $ 200 per barrel. While black gold is 4-5 times cheaper. Of course, now, such predictions look strange, but the reasons for the new rise in oil prices a lot. "Ribbon.ru" assessed the main ones.
1. The collapse of investment
In the beginning of the oil industry worldwide has experienced a boom in investment. Oil searched literally everywhere, as the prey seemed to be super profitable. More than others in this field have distinguished the major developed countries, primarily the United States and Canada. In America it is very time arrived frekinga technology and horizontal drilling (which existed long ago, but brought to mind only in the 2000s).
This allowed us to produce shale oil, which previously were considered inaccessible. By the end of 2014 in the USA produced 9 million barrels of oil a day against 5.5 million in the beginning of the decade. In Canada as heavy oil has started to extract oil from the tar Sands earlier.
However, it all made sense at the price in 100 dollars for barrel. Now that oil costs about 50 dollars, mining is far less profitable. The dispute about at what price shale oil profitable, is very long, and clarity is not here. From the Deposit to the Deposit cost varies widely, but in the current situation a significant portion of the wells will still fall out of the business. The only question is how much specifically. So far, according to oilfield services company Baker Hughes, as the worlds largest deposits of shale gas the number of new wells (and wells with this method of extraction is short-lived) from October to December declined from 794 to 954, i.e., 15 percent.
You need to understand two things: first, open wells while another will increase the overall production volume. Secondly, some companies who paid for the materials or work, will continue drilling to produce any oil and pay off your loans. The role of the latter are generally very significant, since most involved in the shale boom players are working with borrowed funds. And in 2015 they will have substantial payments on the loans. From ruin small companies the number of commissioned wells will be reduced even more.
With the current negative dynamics by the end of the year, we should expect the departure of about 2 million barrels per day, which is almost two times higher than the current preponderance of supply over demand, which, in fact, caused the collapse of prices. And, of course, investments in new projects will sharply slow down, giving the effect for another few years.
But among US the problem is not limited to. Every expensive oil, not only shale, will produce less actively. Meanwhile, expensive projects now provide stable supplies to the global market with cheap oil in a world less and less. We are talking about offshore fields, such as those that are developed off the coasts of Norway, Australia and Brazil, as well as the above-mentioned bituminous Sands (the situation is somewhat facilitated by the fact that the majority of investments is made at the very creation of the mining pit).
Comparison with the oil shock of 1986 as relevant as ever. Then Saudi Arabia has ceased to comply with the restrictions of OPEC to strike a blow to competitors, including American oil industry. To some extent, the plan worked — the Arabs have become the hegemons of the oil market and U.S. oil sector received a blow from which it recovered only in 2000. However, and oil prices remained low for six decades. But in the current situation has its own nuances.
2. Peak conventional oil
30 years ago it seemed that the oil river. By the 1980s, the years operated at full capacity field of the North sea, increased production of the USSR, Mexico and Venezuela. Now the traditional reserves of oil don't look so brilliant. Mexico, Norway, the UK reduce the production the first year. Even before the collapse of prices in LUKOIL predicted that oil production in Russia will soon go on the decline, albeit slowly.
In the 1960s the American economist Marion Hubbert predicted the peak of oil production, after which begins the decline and the world will face shortages of key energy resource. In the U.S. production peaked exactly with the prediction of Hubbert in 1970. World peak has not occurred in the 1990s and 2000s, although the first bells rang. Hubbert could not know, is about shale oil. But conventional oil is not infinite, and a special production growth long time no see.
Shale oil completely replace the traditional can not. Only possible payment deficit — at a higher price. One way or another, but this factor still plays increase, anyway, in comparison with current quotations at the market. However, the exhaustion of the main deposits actually affect the market only in the medium term, towards the end of the decade.
3. The recovery in global demand
More important for oil prices positive signals from consumers. While the world economy is not in the best shape, but it can't last forever. As stated at the Davos forum, Minister of economy and trade Qatar Sheikh Ahmed bin Jassim al-Thani, very soon prices will rise to $ 60 per barrel due to demand growth. "Hundred" in his opinion, can be expected not earlier than in two years.
The most important manufacturers lay hopes on China, which since the beginning of the century made a phenomenal leap with the 7-th position in terms of GDP in the world at the second. And the Chinese have room to grow — similar to neighbouring South Korea and Japan of the trajectory of development.
The rate of growth of the Chinese economy slowing down, but everyone would be so set to accelerate as slowing China. Even now, China adds 7.6 percent per year, for a large developing economy with an excellent result. The motorization of the country requires more and more fuel mainly petroleum origin. However, the CCP has tried to limit this process for fear of environmental risks, but China will still buy more cars.
There are prospects and India, whose share of the global economic pie is growing steadily. If 10 years ago the growth of the Indian economy at 7 percent per year in absolute numbers were very humble, but now it's almost $ 200 billion. That again means increase in energy consumption.
Finally, there is the United States. The Millennium generation, that is Americans who reached adulthood in the Millennium, for his habits were considered the least American in the entire history of the country. For example, they are reluctantly buying cars and using public transport. This was due to high oil prices and the long crisis of the American economy. For some time petrol cheap, and incomes, at least some of the youngsters grow. There are serious reasons to believe that the motorization of America will resume — with corresponding consequences for the oil market.
4. Geopolitical turmoil
In the past, international instability, changing the balance in the oil market dramatically — it is enough to remember two-fold increase in oil prices on the background of the Gulf war in 1990. Oddly enough, but the turbulent century from the beginning of last year the prices brought down. But this does not mean that there will be no return, for the world is teetering on the verge of danger. Almost all the major conflicts in 2014 occurred in the regions directly related to the production or transit of energy: the civil war in Ukraine, the expansion of the "Islamic state" in the Middle East, the standoff between the government and Islamic radicals of Boko Haram in Nigeria.
The Arab world continues to suffer the consequences of "spring" 2011. Armed conflicts in these regions in the foreseeable future is unlikely to fade away. And the diminishing budgets of oil monarchies creates a new cause of instability. And in the long term, another threat to energy supplies from the Persian Gulf.
Of course, to name the specific time change of the oil trend is a thankless task. But six months ago seemed fantastic predictions about double the drop in fuel prices. It is hardly necessary to repeat the mistake of underestimating the analytical abilities of the Secretary-General of OPEC.
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