World News
ENI: Oil Price Could Hit $200 bbl in 5 Years if OPEC Fails to Act
Italy's ENI S.p.A has said oil prices could hit $200 per barrel (bbl) in the next four to five years if OPEC does not restrict the supply of crude oil, BBC reports.
Claudio Descalzi told an audience at this week's World Economic Forum in Davos, Switzerland, that a drop in capital investment by oil firms would lead to longer term oil shortages, and therefore steep price rises.
Descalzi said the oil industry is likely to cut investment by 10 to 13 percent this year as oil prices have more than halved to below $50 bbl.
"OPEC is like the central bank for oil which must give stability to the oil prices to be able to invest in a regular way," he said.
But OPEC's Secretary General Abdullah al-Badri said the cartel would hold firm for the time being.
"Everyone tells us to cut," he said.
"But I want to ask you, do we produce at higher cost or lower costs?
"Let's produce the lower cost oil first and then produce the higher cost.
"We will go back to normal very soon," he said.
Recently, BIMCO suggested the low oil price may prompt a dampening of enthusiasm for eco-ships and LNG bunkers.
In December Maersk Line said the oil price would have to remain low for a prolonged period before it changed its fuel reduction strategies, something that Descalzi's prediction suggests is unlikely.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 646.50 | 5.50 | 773.50 | 11.50 |
| Rotterdam | 604.00 | 5.00 | 756.00 | 5.00 |
| Houston | 630.50 | 1.00 | 798.50 | 4.00 |
| Fujairah | 650.50 | 3.00 | 897.00 | 13.50 |
| Global 20 Ports Average | 662.50 | 1.00 | 858.50 | 0.50 |
| Global 4 Ports Average | 633.00 | 3.50 | 806.00 | 6.50 |
| Global Average Bunker Price | 718.50 | 0.50 | 914.00 | 1.00 |
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