Crude oil prices are projected to range between US$58 and US$68 per barrel over the next few months in tandem with industry expectations, according to Hibiscus Petroleum Bhd managing director Dr Kenneth Gerard Pereira.
He said the benchmark Brent crude oil, currently trading at US$63 per barrel, was a strong indication of underlying demand due to growing world population.
“Crude oil prices are strong and trending up, it is not as volatile as it was before,” he told reporters at the Hibiscus Petroleum corporate and business update here yesterday.
Pereira said the global population would increase from about 7.3 billion to over nine billion by 2040.
Meanwhile, he said the company’s unit, Anasuria Hibiscus (UK) Ltd, has completed two key projects in the Anasuria cluster oil and gas fields in the UK continental shelf recently.
• strict compliance to assigned oil production / delivery quotas by the Organization of
Petroleum Exporting Countries (“OPEC”) and friendly allies (including Russia); and,
• real growth in worldwide demand which, in turn, is gradually draining global inventories.
Figure 1 – Oil Price for the Brent Crude Oil Benchmark for the Period June 2017 to October 2017.
Even though Brent Futures pricing has been in backwardation (i.e. current prices are higher than future prices) in recent months, current expectations are that recent gains are going to be sustainable as the prolonged period (2015 – 2017) of minimal investment in exploration and development projects coupled with the above-mentioned factors of OPEC compliance to supply cuts and real global growth take their combined toll. The majority of industry commentators and analysts now expect the Brent crude oil benchmark to range between US$ 58 to US$ 68 per barrel over the next several months. Given our historical operating performance metrics, these stronger oil prices trends should be a positive development for the Group.