Americas News
Vitol: Oil Will Trade At $50-70 Per Barrel in Late 2015
The world's largest oil trader Vitol Group has predicted that crude oil prices will find a bottom around $50 per barrel, and will likely trade between $50-$70 per barrel in the second half of 2015, Bloomberg reports.
According to the company, $50 is the lowest amount that some producers can withstand and still be able to invest in new supply.
“We still subscribe to the likelihood that over time prices still have to go back up again because you still need to invest,” said CEO Ian Taylor.
“People won’t invest unless they can make the upstream business work and it’s not just U.S. shale."
Taylor also sees U.S. production decreasing over the next year and demand "looking quite good," which will likely push oil prices up.
Other experts also theorized that oil prices “overreacted to the downside” when crude dropped by over 50 percent in the latter half of the year.
According to Mercuria CEO Marco Dunand, crude prices still need to rise to $80 per barrel before it will be able to attract investment and replace lost production.
He estimates that markets are losing up to 5 million barrels every day from supply that needs to be replaced every year.
Oil prices began its slide last September, but took a steep plunge in November after the the Organization of Petroleum Exporting Countries (OPEC) announced that it was maintaining its 30-million-barrel-per-day production ceiling.
In February, it was reported that in the aftermath of the oil collapse, the number of U.S. oil-producing rigs saw its biggest fall in 30 years.
