The International Energy: high oil prices, massive and exceed $ 120 next year

Views 73 09/15/2016

He said the latest report of the International Energy Agency, in declining investment in the oil and gas sector to the lowest level in 60 years, is a threat of a crisis in supply with the second half of next year and lead to skyrocketing oil prices is greater than any rise was followed by falling prices in the previous crisis.

A report by the Organization of Petroleum Exporting Countries (OPEC) has been issued a few days ago pointed to the continued imbalance of supply and demand with a glut in supply, compared with global demand, which means the continuation of low prices in the next year.

According to the International Energy Agency, an adviser in the field of energy states Development Organization for Economic Cooperation report, the global demand continues to decline against the increased supply, but the production capacity reserve in the world also strongly back down, and now more than 1.7 million barrels per day, with the arrival of the production of senior Exporters to full capacity.

And any natural cycle of oil prices that prices rise sharply after the landing, but the continued fall in prices since the summer of 2014 led to a dramatic decline in investment in the sector and the failure to reach a new oil discoveries to meet demand in the event of increase it.

According to the IAEA report, annual investment in the global energy sector in the last two years of $ 780 billion, fell to $ 450 billion, it does not seem that they will recover in the near future.

The total depletion of existing wells, the rate of 9 per cent annually, the report adds: "There is evidence that the decline in investments has led to a dramatic reduction in oil discoveries to come down to an unprecedented level in 60 years."

Observers believe that this decline in investments and discoveries will give OPEC producers Russia and a great advantage with the continuation of the world's dependence on oil.

And it separates the "Global Energy Investment Report 2016" issued by the International Energy Agency, how the biggest decline in investments is in the major industrialized countries, the Gulf states and Russia did not see a big drop.

But the benefits of declining prices and investment that the cost of production is declining, making reasonable margin of profit even with lower prices, in most producers of OPEC countries do not exceed the cost of production of $ 10 a barrel.

And analysts estimate in the oil market, that this session of the movement of prices does not resemble any of its predecessors, as usual in the event of falling prices due to oversupply to take the demand to grow, but what happens to global demand growth in the decline did not increase in the last quarter to 800 thousand barrels per day.

The prevailing belief that other energy sources can compensate global dependence on oil is not supported by electric cars or hybrid sales figures, and the replacement of electric power generated from renewable sources at the expense of those generated by gas-fired plants or oil derivatives.

Many analysts and observers agree that if the current situation continues, the lower prices until the second half of 2017 could lead to a dramatic rise in an unprecedented probably exceed the level of prices before June 2014, when the price per barrel was about $ 120