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Page added on October 6, 2015
Shell CEO sees oil price recovery
Oil markets are beginning to recover but the scale of global oversupply means prices may rise only slowly, the chief executive of Royal Dutch Shell Plc (RDSa.L) said on Tuesday.
“I see the first mixed signs for recovery of oil prices,” Ben van Beurden told an oil industry conference in London.
“But with U.S. shale oil being more resilient than we originally thought and a lot of oil still in stock, it will take some more time to rebalance demand and supply,” he added.
Oil prices have collapsed over the last year in the face of heavy oversupply, with benchmark Brent crude LCOc1 falling to below $50 a barrel from a high above $115 in June 2014.
The Organization of the Petroleum Exporting Countries led by Saudi Arabia has increased production in an attempt to build market share, leaving some other producers, including shale companies in North America, operating below break-even costs.
Van Beurden said many U.S. oil producers would struggle to refinance while prices remained so low, leading to lower output in the future: “Producers are now looking for new cash to survive and they will probably struggle to get it.”
Longer-term, there was a risk that low levels of global production could bring a spike in oil prices, he said.
If prices remained low for a long time and oil production outside OPEC and the United States declined due to cuts to capital expenditure, there was not likely to be any significant spare capacity left in the system, he said.
“This could cause prices to spike upwards, starting a new cycle of strong production growth in U.S. shale oil and subsequent volatility,” van Beurden said.
6 Comments on "Shell CEO sees oil price recovery"
BC on Tue, 6th Oct 2015 7:14 pm
A technical bottom and possible breakout for WTI has occurred on a weekly basis, with bullish RSI and MACD divergences at the lows and resistance/stop at $56-$63.
Let’s see if the HFT bots get behind the momentum off the low to juice futures higher.
GregT on Tue, 6th Oct 2015 7:22 pm
“This could cause prices to spike upwards, starting a new cycle of strong production growth in U.S. shale oil and subsequent volatility”
And continued irreparable economic damage around the globe.
Davy on Tue, 6th Oct 2015 8:18 pm
The damage has been done. We may see some activity upwards but how can that be supported by a deflating global economy. Investors are gun shy now. I doubt they will pile into energy stocks like during the shale gold rush. We are heading into the winter with a shaky economy. I feel confidence and optimism has taken a hit. I see no reason to get excited about what is ahead.
makati1 on Tue, 6th Oct 2015 9:17 pm
Old oil pimp … more lies.
kanon on Wed, 7th Oct 2015 9:39 am
I expect Shell to be involved in a large merger in the near future. I think so because they were desperate enough to spend a lot in the Arctic and they had a losing foray into tar sands earlier. I am guessing they are running low on reserves and their best way to get value is to merge.
Kenz300 on Wed, 7th Oct 2015 9:49 am
Oil producers keep pushing the only product they have to sell……
It is time for “OIL COMPANIES” to wake up and see that fossil fuels are on the way out. Electric vehicles and bicycles are the future….
Alternative energy sources are the future……safer, cleaner and cheaper……
Solar and Wind Just Passed Another Big Turning Point
http://bloom.bg/1WK34MZ