Posted by OilVoice Press - OilVoice
McKinsey Energy Insights (MEI), the data and analytics specialist that provides distinctive insight and support to the global energy industry, has released its latest Global Oil Supply and Demand Outlook, in which the company projects that global oil prices will remain in the USD50/bbl-USD60/bbl range until late 2020. The outlook outlines oil supply and demand balances as well as macro outlooks on global oil price scenarios to 2030.
With market uncertainty causing oil prices to decline from USD55/bbl in January to USD46/bbl in June this year, MEI has revised its “lower for longer” scenario. Over the medium term (2017-2020), with inventories still being absorbed, MEI considers it likely that Brent prices linger in the USD50/bbl range until early 2020, only approaching USD60/bbl in late 2020.
The outlook is driven by market uncertainties, which are a mixture of negative (supporting lower prices) and positive (supporting price recovery) market fundamentals. In the medium term, six key signposts are expected to impact the speed of market rebalancing and price recovery under MEI's “lower for longer” scenario:
In the long term (2020-2030), MEI estimates that exploration and production companies will need to add 35 MMb/d of new crude production from unsanctioned projects by 2030 to meet demand. Under these circumstances, 2025-2030 marginal costs are projected to reach USD60/bbl-USD70/bbl.
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