Oil price analysis
Shell Chief Executive, Mr. Peter Voser has predicted that oil prices in the second half of this year will fall as demand reacts to the slowing global economy and international political tensions ease.
Oil prices fell a second day on Friday, heading for the longest run of weekly losses in more than 13 years.
This was sequel to speculation on the economies of the world’s biggest crude consumers United States of America (USA) and China
These developments were expected to slow and curb fuel demands.
Bloomberg reported that oil for July delivery decreased as much as $2.72 to $82.10 a barrel in electronic trading on the New York Mercantile Exchange, and was at $82.23 at 9:15 a.m. London time.
“Global demand is softening, we have got recessionary elements in Europe, a small slowdown in Asia Pacific,” Voser told Reuters in an interview on the sidelines of the World Gas Conference. He added: “At the same time some of the geopolitical elements of price volatility over the past few months have kind of receded, and therefore we see a softening of prices which I expect to go well into the second half of this year.”
The newswire reported that concern about the impact of USA and European sanctions on oil supply from Iran helped drive Brent above $128 a barrel earlier this year. Those concerns have eased, and Voser said the global oil market had enough supply to deal with the impact of the sanctions.
“I think the world has dealt with that,” he said, when asked about the impact of sanctions on exports. The pace of oil demand would recover slowly in 2013, and prices would rise with it, he added. Voser added that output from Iraq’s giant Majnoon oilfield, which Shell is developing and operates, will reach 175,000 barrels per day (bpd) before 2015, up from around 65,000 bpd to 75,000 bpd now.
Speaking on the liquefied natural gas market, Shell said exports of the fuel from USA would help meet the rapid growth in world demand, which it expects to double by 2025. It sold 18.83 million tonnes of LNG in 2011, up 12 percent from 2010 on higher output from Qatar, Nigeria and Russia.