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Oil prices have bottomed out and the oil market is about to self-repair
According to a CNN report on February 4, OPEC Secretary General Abdulla al-Badri recently stated that the current international oil price has bottomed out, and that a decline in crude oil production could cause prices to surge to $200 per barrel in the future. In recent remarks in London, the OPEC Secretary General stated that the current international oil price has fallen to its lowest point, between $45 and $55 per barrel, and indicated that future oil prices will rebound and potentially rise rapidly to $200 per barrel, though he did not provide a specific timeframe. The belief that oil prices have bottomed out is not unique to the OPEC Secretary General; such statements are usually unconvincing, but coming from the OPEC Secretary General, they carry significant weight. Al-Badri's remarks do not imply that OPEC will change its previous strategy of maintaining stable oil production to intervene and boost the oil market. Instead, it suggests that oil companies will independently significantly reduce production, allowing the market to self-correct and ultimately leading to higher oil prices. Additionally, the decreasing number of oil wells in the United States typically signals the appearance of a bottom in oil prices. However, al-Badri warned that reduced investment could lead to a future supply shortage of oil. Global oil fields naturally decline in production by 5% annually. Over the next 15 years, global oil companies need to produce 200 billion barrels of oil to meet demand, requiring investments of $7 trillion to $10 trillion. Due to the continuous decline in crude oil prices since last year, oil companies have delayed investments totaling $150 billion, and it will still take several years for these investments to translate into actual productivity. Therefore, oil prices may rise rapidly in the future. He also pointed out that for OPEC countries, maintaining stable oil production, while causing short-term economic disadvantages due to low oil prices, will allow them to capture a larger market share when oil prices rebound in the future.
Publish time：
2020-10-16
According to a February 4th report by CNN, OPEC Secretary General Abdulla al-Badri recently stated that the current international oil price has bottomed out, and that a decline in crude oil production could cause prices to surge to $200 per barrel in the future.
In recent remarks in London, the OPEC Secretary General stated that the current international oil price has fallen to its lowest point, between $45 and $55 per barrel, and indicated that future oil prices will rebound, potentially rising rapidly to $200 per barrel, though no specific timeframe was given. The belief that oil prices have bottomed out is not solely held by the OPEC Secretary General; such statements are usually unconvincing, but coming from the OPEC Secretary General, they carry significant weight.
Al-Badri's statements do not imply that OPEC will change its previous strategy of maintaining stable oil production to intervene and boost the oil market. Instead, it suggests that oil companies will independently significantly reduce production, allowing the market to self-correct and ultimately leading to higher oil prices. Additionally, the decreasing number of oil wells in the US typically signals the appearance of a price bottom. However, al-Badri warned that reduced investment could lead to a future supply shortage of oil.
Global oil fields naturally decline in production by 5% annually. Over the next 15 years, global oil companies need to produce 200 billion barrels of oil to meet demand, requiring investments of $7 trillion to $10 trillion. Due to the sustained decline in crude oil prices since last year, oil companies have delayed investments totaling $150 billion, and it will still take several years for these investments to translate into actual production capacity; therefore, a rapid rebound in oil prices is possible in the future.
He also pointed out that for OPEC countries, maintaining stable oil production, while resulting in short-term economic disadvantages from low oil prices, will allow them to capture a larger market share when prices recover in the future.
Keywords：
Oil price,Petroleum
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