At GCE NODE’s Top Manager Forum recently, the CEO of Rystad Energy gave an in-depth analysis and outlook for the oil market.
Rystad provided three explanations for the collapse in oil prices; Shale oil, weaker demand and Saudi Arabia.
“Output from US shale oil producers is 0.7 million barrels per day higher than expected. The shale oil revolution has, in just two years, increased production with 6 million barrels, which is equivalent to a sudden appearance of a new Saudi Arabia in the market.
At the same time, global demand is decreasing and is now 0.6 million barrels per day lower than expected. This provides an unbalance, which inevitably puts pressure on the price”, says Rystad.
“As we now know, Saudi Arabia is unwilling to again balance supply and demand. The kingdom has several good reasons to let the market balance itself, which we already see is happening. We predict demand to surpass supply within one year”, says Rystad.
“Things will be rough for some time, and you might see everything as pitch black. However, the sun did not set permanently, we are just in a long tunnel”, says Rystad.