Oil, Gas Prices Likely To Continue Downward Trend in 2016
France’s Total and Goldman Sachs don’t see oil prices to recover in 2016. Their declarations come at a moment when the Brent crude fell below $42/barrel in the aftermath of the conclusion of the OPEC 168th meeting on Friday that did not lead to any production cuts.
Total’s CEO Patrick Pouyanne said on Monday that he does not anticipate a recovery in 2016, explaining he expects supply to grow faster than demand. The current oil trend will have an impact on gas prices.
In its energy daily report, DNB reported on Friday that TTF and NBP continue to lose ground.
The combination of lower oil and gas prices is affecting the industry, paving the way for more layoffs. On Monday, for instance, oilfield equipment maker National Oilwell Varco (NOV) cut 900 permanent jobs in Norway.
Similar decisions are likely to follow, given the increase in US production and OPEC’s decision to allow its members to set up their own strategies to overcome difficulties related to current market conditions. The 13-member oil cartel will maintain its rate of production at around 31.5 million barrels a day.
‘In examining the current status of the oil market, the Conference respected the input and ideas of all Member Countries to find ways and means to deal with the challenges they are facing in the global oil market today. The Conference observed that, since its last meeting in June, oil and product stock levels in the OECD have continued to rise. The latest numbers see OECD and non-OECD inventories standing well above the five-year average’ reads a document published on OECD’s website at the end of the 168th meeting.
As a result, Goldman Sachs said on Friday it does not exclude the possibility of additional decline in oil prices.