Tumbling crude oil prices have put the squeeze on producers across the world.
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For months top U.S. investment bank Goldman Sachs has warned that the price of oil could drop to US$20 a barrel, while analysts at Standard Chartered are now reportedly warning that the price could continue to fall to US$10 a barrel.
According to Novak, this price is “fair and fundamental”.
The collapse in the commodity is being driven by a surge in supply.
Although the price of oil was at the lowest level in more than a decade, Stockdale said refined petrol was only at a 12 month low.
With regards to slowing growth in China, he dismissed the current 7% advance in GDP as “slow growth”, adding that this was not negative for the global economic outlook. “I think (the price) is going to drop into the low 20s or high teens”, says Jordan Goodman, a financial expert known as America’s Money Answers Man. “And you’ve been seeing a result of that, which is a dramatic cutback in oil production, exploration, and research and development”.
He ruled out the oil price falling to a long-tern price of $10 per barrel from around $30 now.
However, people buying home heating oil have enjoyed a bigger benefit.
Russian Federation will see a “slight increase” in output from last year’s levels, Novak said.
It said “no one would have predicted such a dramatic fall in prices a few years ago” and that “consumers who switched from oil to gas now want to return to oil”. Only this week Morgan Stanley added its US$20 oil price prediction to the mix.
On Friday the price of the futures contract for Brent crude oil February delivery declined by 3% to $29.8 per barrel on the London Stock Exchange (ICE).
The global head of oil content for Platts, Dave Ernsberger, said that began to happen as soon as US Congressional leaders lifted the longstanding restrictions on US crude oil exports in December.
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The imminent return of Iranian oil to the market is making headlines as everyone believes the hundreds of thousands of barrels in floating storage will be ready to set sail.
