Crude to fall under $100/bbl by year-end - survey

09 May 2008 15:00  [Source: ICIS news]

LONDON (ICIS news)--The majority of oil and gas executives think the price of oil will fall below $100/bbl by the end of the year, according to a report released by KPMG LLP’s Global Energy Institute on Friday.

 

Even as oil prices had ascended to records of more than $125/bbl, 55% of the 372 financial executives from oil and gas companies surveyed said they thought the price of a barrel of crude would drop below $100 by the end of the year, KPMG said.

 

Twenty-one percent thought the price would fall between $100/bbl and $110/bbl, 15% said between $111/bbl and $120/bbl, while only 9% predicted it would remain above $120/bbl.

 

“The combination of traders moving resources into commodities and the weak dollar has had a significant role in the surge in pricing in recent weeks,” said executive director for KPMG’s Global Energy Institute Bill Kimble.

 

“However, in addition, there are underlying, issues in the energy industry, such as escalating energy demand in emerging markets and declining oil reserves, which will continue to contribute to upward pricing pressure for years to come,” he added.

 

In contrast to the report, investment bank Goldman Sachs has warned oil could shoot up to over $200/bbl in the next two years as part of a "super" spike driven by poor growth in oil supplies. OPEC president Chakib Khelil also said he would not rule this out.

 

When asked what would most enhance US energy security, only 28% of the executives questioned by KPMG thought the pursuit of renewable energy such as biofuels was the answer, with 71% favouring the development of either the Arctic National Wildlife Reserve or the Rocky Mountain region for oil drilling.

 

Fifty-four percent said it would not be viable to mass produce any alternative fuels by the year 2015.

 

For further discussion of the chemicals industry visit ICIS connect

By: Mark Watts
+44 20 8652 3214

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly