CATEGORIZED | News

Will oil fall to $20 on 20 December?

Posted on 28 July 2009

 Noted industry analyst Philip Verleger, founder of PKVerleger LLC, predicts that oil prices will plummet to $20-$30/bbl by December, driven by low demand and a dearth of storage. Dr Verleger made his remarks in the Bloomberg on the Economy podcast with Tom Keene. The podcast aired on 20 July. “We’re about 5% away from the previous peak in global inventories, which was about 6.5 billion barrels of oil,” Dr Verleger said. “By September or October, we’ll have reached capacity, particularly for products. Essentially there will be much less demand for crude. The critical reason we’ll see a fall is that we’ve essentially made enough heating oil … to almost make it through the winter even if half the world’s refineries shut down.”

“There’s no place left to put the oil,” he said.

Dr Verleger said that prices will drop precipitously, rather than slide gradually. “Suddenly storage costs go way up, and as storage costs go up, people pay less for the crude.”

Leave a Reply

*

FEATURED MICROSITES


Recent Drilling News

  • 31 October 2014

    Japan Drilling to operate new jackup under construction at Keppel

    The KFELS Super B Class design has a drilling depth of 35,000 ft. The rig's leg structure is designed to provide enhanced robustness for operations at 400 ft water depth...

  • 29 October 2014

    New intelligent water management solution based on oxidizer technology

    Nalco Champion has launched the RenewIQ line of oilfield water reuse solutions to help operators reduce freshwater consumption and associated handling costs...

  • 29 October 2014

    Baker Hughes launches all-electric intelligent well system

    Baker Hughes has commercially released its MultiNode all-electric intelligent well system. It allows operators to remotely monitor and control a greater number of production zones...

  • 29 October 2014

    Tercel collaborates with TOTAL to design MicroCORE PDC drill bit

    Tercel Oilfield Products has launched the MicroCORE cutting system at the 2014 SPE Annual Technical Conference and Exhibition in Amsterdam. The MicroCORE cutting...

  • 28 October 2014

    First extension well in pre-salt Libra leads to oil discovery

    The Libra consortium announced that the drilling of the first extension well in the Libra area, known as 3-BRSA-1255-RJS (3-RJS-731), has proven the discovery of high-quality oil...

  • Read more news