Patrick Pouyanne, Chief Executive of Total, expects oil demand to remain strong, yet unsteady.
He said oil demands saw increasing numbers for 2015, a rise of 2 percent. “This year, experts see demand at about 1.2 million barrels per day. Me and my team see it at about 1.4 million barrels per day, which is still strong and means the market is rebalancing, but will not rebalance completely by the end of the year, however, it will somehow support prices.”
Hope has been given to the oil crises future. With demand high as supply begins to weaken, prices rose from January’s $26 per barrel to $50 per barrel. The company opened eyes to unchanged global demand, leaving future risks to the upside.
Pouyanne states projects decided some years ago when prices were $100 per barrel are expected to begin in 2020. He adds investments have taken a drastic hit, continuing, “However, investments have fallen sharply, and we are not preparing production for the years 2019-2020. At this rhythm, there could be a shortfall of supply and a counter shock. There could be a shortfall of about 5 million barrels in that horizon, which is a lot. All of this because volatility has been extreme.”
Article written by HEI contributor Marcela Abarca.