Bunker Prices to Remain Under $500/mt for Rest of the Decade, Shell Prediction Suggests
The energy major says oil prices will take several years to recover and rise to $90 per barrel by 2020.
Shell says prices will take several years to recover
A Royal Dutch Shell director says oil prices will take several years to recover and rise to $90 per barrel by 2020, or around $677.70 per metric tonne (pmt), Reuters\u00a0reports.
The prediction suggests that IFO380 bunker prices in major ports, which dipped under $500 pmt in October last year, will not recover to the same level until the end of the decade.\u00a0
Shell had shown considerable confidence in the prediction, saying it is a key assumption\u00a0of its $70 billion\u00a0purchase of\u00a0BG Group, one of the largest players in the frozen gas sector.
Andy Brown, upstream international director for Shell, told Reuters that "We are not banking on an oil price recovery overnight.
Shell forecasts Brent crude oil to average $67 and $75 a barrel in 2016 and 2017 respectively, which would translate to bunkers in major ports priced at an average of $353 pmt in 2016, and $395 pmt in 2017
"It will take several years, but we do believe fundamentals will return."
Shell forecasts Brent crude oil to average $67 and $75 a barrel in 2016 and 2017 respectively, which would translate to bunkers in major ports priced at an average of around\u00a0$353-378 pmt\u00a0in 2016, and $395-424 pmt in 2017.
Brown added that until oil hits the $90 mark, "We, like other companies, will have to make sure we stay robust."
Part of Shell's strategy to stay robust is its heavy investment in the Liquefied Natural Gas (LNG) market, and Brown said that Shell's operation of over 40 LNG ships and other activities will increase dramatically when the BG acquisition is concluded.
He also predicted LNG supply will rise to 460 million tonnes annually by 2030, nearly double the volumes delivered in 2014.
"We see the number of countries taking LNG doubling to 50 over that period of time," he said, adding that China, Southeast Asia, Europe, India, the Middle East, and South America are growth regions for Shell.
BG's LNG portfolio will reportedly give Shell roughly 16 percent of the global LNG market, further propelling its position as a market leader.
Skangas duel fuel LNG carrier Coral Energy (image credit/Skangas)
Liquified natural gas (LNG) bunker tanker Coralius has made its first trip loading and delivering LNG to and from Norwegian ports, according to trade press reports.
The 5,800 cubic meter capacity tanker, which is owned by Norwegian gas company Skangas, was delivered to the company in June. Skangas also operates LNG carrier Coral Energy.
OPEC Cutback Extension to be Discussed in November, But Developments Could Render Any Deal Meaningless
Analysts say everything from Saudi exploration to rising tensions with North Korea could radically alter the dynamics of the international market. File Image / Pixabay
Ever since the Organization of the Petroleum Exporting Countries (OPEC) extended the duration of its production cuts earlier this year to March of 2018, speculation has been rampant that the meager cutback volume coupled with the large number of members