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Oil Price could be $55 or $90 in Five Years

Source: www.gulfoilandgas.com 10/21/2016, Location: Europe

While most experts agree Opec will cut production, their views on how that will affect the market differ widely. Analysts generally assume the cartel, which once held the oil market in its thrall, will agree to drop output by between 500,000 and a million barrels per day. However, there are fewer consensuses among senior figures in the energy market over where the oil price goes from there.

According to Reuters, the World Bank forecasts it will increase next year, but only to around $55 a barrel. According to Bernstein Energy, prices will advance to above $60 and go on to $70 in 2017.

The Economist Intelligence Unit sees prices being affected by falling demand from China and flexible output in the US, which will rise along with the oil price. The cost of a barrel could still be as low as $55 and will probably be no higher than $65, according to Oilprice.com. Meanwhile, there are those, such as the Saudi Arabian oil minister Khalid al-Falih, who predict oil prices will spike in the years to come as substantially reduced investment in the past two years feeds through into a supply shortage.

According to the chief energy economist at private equity fund Arc Financial Corp, while "short-cycle" investing in projects that are economical at a sub-$60 oil price are "de rigour", there could be a limit on how long this can last. As a result, oil could "head back to $90 sooner than thought".

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Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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