No $100 Oil until 2020 | Russell T. Rudy Energy LLC
“World Oil” reports that Nobuo Tanaka, former head of the International Energy Agency (IEA), predicts that oil prices will not reach $100 per barrel until 2020 to 2025. He anticipates depressed prices until U. S. shale production starts to decline. This, in conjunction with increasing demand from Asia and Africa, will enable prices to eventually recover.
Tanaka went on to say that “Shale production is a built-in stabilizer. OPEC used to manage the production to stabilize the price; that was the regime before but now when OPEC gave up this kind of function, now the shale oil is acting in the market as a built-in stabilizer. These are the new dynamics of the market.”
The former head of the IEA thinks that the global glut of crude will continue well through the end of this year, but there might be a supply shortfall by the second half of 2016. Until then, he sees prices continuing at current levels. One cause for pessimism is Iran’s promise to increase production by 500,000 barrels of oil per day within six months, and double that increase within a year.
To read the article in its entirety, please go to http://www.worldoil.com/news/2015/10/13/oil-seen-below-100-until-2020-by-ex-iea-chief-due-to-us-shale .
