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

  • 15 September 2014

    US Treasury announces expanded sanctions with Russian companies

    US Treasury Secretary Jacob J. Lew has announced that persons operating within Russia’s defense and related materiel sector may now be subject to targeted sanctions…

  • 11 September 2014

    Cameron elects Scott Rowe as President and COO

    Scott Rowe will assume the newly created position of President and COO of Cameron, effective 1 October 2014. In his new role, he will report directly to Jack Moore, Chairman and CEO of the company...

  • 11 September 2014

    Statoil, GE and Ferus Natural Gas Fuels expand flare gas solution in Bakken

    A joint venture of GE and Ferus Natural Gas Fuels (Ferus NGF), along with Statoil plan to expand a pilot project to capture flare gas and use it to power up to six...

  • 10 September 2014

    6 elements of successful collaboration among NOCs, IOCs, service companies

    The oil and gas landscape is shifting, with the continuing growth of NOCs and the industry going toward unconventional resources and new frontiers…

  • 09 September 2014

    PTTEP: NOCs, IOCs and service companies must combine strengths to overcome challenges

    As assets become more mature and operations become more complex, industry is challenged with finding economical and environmentally friendly operating strategies...

  • Read more news