Oil Prices To Hit US$60 By End-2017 - Wood Mackenzie

KUALA LUMPUR, March 24 (Bernama) -- Global oil price will move up to US$60 (US$1 = RM4.02) a barrel by end-2017 as demand is expected to increase on the back of flat production, said global research firm, Wood Mackenzie. Its Head of Research for Asia-Pacific, Craig McMahon, said the global oil demand, which had averaged 1.4 million barrels a day this year, would likely increase by a further million barrels a day in 2017. "That dynamics of flat production against increase in demand will redress the balance and the oversupply within the market. However, the price will increase slowly and gradually. "The cyclical nature of demand tends to show that demand will be higher in the second half of the year ... so we expect to see a real genuine rebalancing of the market by then," he told a media briefing on the third day of the four-day Offshore Technology Conference Asia 2016 here Thursday. Scomi Group Chief, Shah Hakim Zain, on the converse, was more conservative in his projection, saying that the global oil price would be at an average US$40 a barrel for the next five years. He said the pressing issue of oversupply remained lingering, and that the oversupply gap of approximately five million barrels a day would be hard to close. "If oil prices settle at US$30-US$40 in the next five years and then there happens to be an upturn, we will be a very efficient industry. Remember that in the 90s, we all still made money at US$20 a barrel. "The price never stayed long at US$100. In fact, it averaged US$65 for the last five years and yet we only remember the US$100 a barrel price," he said. --BERNAMA