Oil at $80-90/bbl justifies project development - consultant

10 June 2013 08:30  [Source: ICIS news]

KUALA LUMPUR (ICIS)--Oil prices must at least remain at $80-90/bbl to justify existing development projects that will create new supply, an executive of energy consultancy Wood Mackenzie said on Monday.

"If oil price starts to fall [below these levels], a number of developments will be cancelled or deferred," David Morrison, chairman for energy at Wood Mackenzie, said in a presentation at the 17th Asia Oil and Energy Conference (AOGC).

At noon Singapore time, July WTI was at $96.15/bbl while July Brent was at $104.70/bbl.

In the medium term, oil prices are expected to "drift a little lower", Morrison said, adding: "We are not predicting a dramatic collapse."

"Technology is unlocking new supply, improving performance," Morrison said.

Despite the advent of new unconventional energy resources, such as shale gas, the use of coal as an energy resource will continue, particularly in Asia, Morrison said.

"We don't see coal going away. Coal burn will increase," he said.

Wood Mackenzie is projecting robust oil supply growth in the medium term, Morrison said.

"Supply will meet demand and mitigate pressure for higher prices," he said.

By: Pearl Bantillo
+65 6780 4359

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