ID :
158139
Wed, 01/26/2011 - 03:59
Auther :
Shortlink :
https://oananews.org//node/158139
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OIL PRICE MAY TOP US$100 PER BARREL IN Q1, SAYS ERNST & YOUNG
KUALA LUMPUR, Jan 26 (Bernama) -- The demand for oil is expected to continue
to rise this year and there is a possibility that oil prices may top US$100 per
barrel in the first quarter, says Ernst & Young.
However, it will be less dramatic than last year, which closed with the
second biggest oil demand increase in 30 years, it said in its oil and gas
quarterly report.
Currently, oil prices hover above US$85 per barrel. The historic peak of
oil price is US$147 per barrel.
"Spare production and new refining capacity should be ample to absorb
short-term demand growth," said Dale Nijoka, Ernst & Young's global leader for
oil and gas.
He however said if developed markets really start moving forward this year,
there will be oil demand implications.
"With oil prices likely to tip over US$100 per barrel, we're continuing to
see a big disconnect between oil and gas prices," he said.
Ernst & Young said economic improvement in Europe and demand from China and
India will significantly impact the demand picture.
However, continued increasing energy demand and higher oil prices would
create an opportunity for alternatives to oil, thus a ripe environment for
marked increases in natural gas use and development of alternative and
renewable energy sources, it said.
For gas, Ernst & Young said, strong growth in shale gas production,
oversupply in the market and low prices would continue to plague natural gas
producers.
To capitalise on higher oil prices, it said there has been a marked shift in
shale production from gas to liquids, which could ease the flood of natural gas
in the market.
For the downstream sector, Ernst & Young said the first half of last year
was a marked improvement for the sector.
However, margins fell quickly for refiners in the summer after the spring
peak and by the third quarter, margins were making gains once again, it said.
The segment finished strong last year, indicating that it may have rebounded
from the bottom, it said.
"With ample capacity and more expansion and re-opening coming online in the
near future, the downstream industry is well positioned to respond to demand
increases," said Ernst & Young.
For oilfield services, it said the sector had a good year last year, with
spending increases pushing 20 per cent, and 2011 is shaping up to be even
busier.
It said recent spending plans announced by major integrated companies,
including ExxonMobil, Shell and Chevron, indicated that the industry was eager
to ramp up investment to meet demand.
However, regulatory uncertainties surrounding offshore production in
certain geographies and hydraulic fracturing in relation to shale gas will
continue to impact operators long-term planning abilities, it added.
to rise this year and there is a possibility that oil prices may top US$100 per
barrel in the first quarter, says Ernst & Young.
However, it will be less dramatic than last year, which closed with the
second biggest oil demand increase in 30 years, it said in its oil and gas
quarterly report.
Currently, oil prices hover above US$85 per barrel. The historic peak of
oil price is US$147 per barrel.
"Spare production and new refining capacity should be ample to absorb
short-term demand growth," said Dale Nijoka, Ernst & Young's global leader for
oil and gas.
He however said if developed markets really start moving forward this year,
there will be oil demand implications.
"With oil prices likely to tip over US$100 per barrel, we're continuing to
see a big disconnect between oil and gas prices," he said.
Ernst & Young said economic improvement in Europe and demand from China and
India will significantly impact the demand picture.
However, continued increasing energy demand and higher oil prices would
create an opportunity for alternatives to oil, thus a ripe environment for
marked increases in natural gas use and development of alternative and
renewable energy sources, it said.
For gas, Ernst & Young said, strong growth in shale gas production,
oversupply in the market and low prices would continue to plague natural gas
producers.
To capitalise on higher oil prices, it said there has been a marked shift in
shale production from gas to liquids, which could ease the flood of natural gas
in the market.
For the downstream sector, Ernst & Young said the first half of last year
was a marked improvement for the sector.
However, margins fell quickly for refiners in the summer after the spring
peak and by the third quarter, margins were making gains once again, it said.
The segment finished strong last year, indicating that it may have rebounded
from the bottom, it said.
"With ample capacity and more expansion and re-opening coming online in the
near future, the downstream industry is well positioned to respond to demand
increases," said Ernst & Young.
For oilfield services, it said the sector had a good year last year, with
spending increases pushing 20 per cent, and 2011 is shaping up to be even
busier.
It said recent spending plans announced by major integrated companies,
including ExxonMobil, Shell and Chevron, indicated that the industry was eager
to ramp up investment to meet demand.
However, regulatory uncertainties surrounding offshore production in
certain geographies and hydraulic fracturing in relation to shale gas will
continue to impact operators long-term planning abilities, it added.
