Rystad Predicts Oil Prices To Rise To US$80 By 2018, US$105 By 2020

By Massita Ahmad SINGAPORE, April 20 (Bernama) -- Oil prices will rise to US$80 (US$1=RM3.87) per barrel by 2018, and up to US$105 per barrel by 2020, a base case prediction by Jarand Rystad, a global expert on oil macro analysis. "Now is the 'time for the opportunist', and those with deep pockets and shareholders willing to forgo short-term dividends are best placed to capitalise," said the Managing Partner of Rystad Energy, a Norwegian-based energy consulting firm. Rystad noted that the current downturn was the result of a temporary oversupply, and not a structural shift in demand for oil. "Even if you make very aggressive forecasts on current trends such as electric cars, LNG (liquefied natural gas) shipping and alternative energies, these won't make any meaningful structural impacts on the oil industry for another 10-20 years," he said. Rystad who delivered his keynote speech at the Offshore Marine Forum (OMF) Tuesday also advised the industry against dangerous further slashing of resources to avoid missing opportunities on the upside. "The top 400 companies cut 250,000 people last year, and will cut another 250,000 by year-end, representing the biggest job cuts of the oil service value chain in history. "This is worrying as it could result in large cost inflation from 2018 onwards when the market recovers," he said. Meanwhile, industry leaders at the forum said companies should be prepared to take advantage of the upside in oil prices, with an expert forecasting prices to start recovering from October. Leaders who participated on the forum panel included Yew Yuen Chow, Chief Executive Officer (CEO) of Keppel Offshore & Marine; Ron Mathison, Managing Director (MD) of Swire Pacific Offshore; Geir Sjurseth, MD at DVB Bank SE; and Carl K. Arnet, CEO of BW Offshore. They concurred with the predictions of improving prices, and commented that the US$50-$60 per barrel was a realistic breakeven point for offshore drilling projects. -- BERNAMA