Financier sees oil shock from credit crunch
LONDON (Reuters) - The global financial crisis and collapse in the oil market have stalled vital investment in oil exploration and production and are likely soon to lead to a sharp spike in prices, an energy consultant and financier says.
Matt Simmons, founder of Houston-based investment bank Simmons & Co, argues the underlying rate of decline of the world's aging oilfields is as much as 20 percent a year and only high levels of investment can reduce that to single digits.
With credit tight and oil prices almost $100 a barrel below their highs last year, oil companies are unable to sustain previous levels of spending and the result is falling production, he said in an interview on Thursday.
"We are three, six, maybe nine months away from a price shock. We are not talking about three to five years away -- it will be much sooner," Simmons told Reuters in London.
"These prices now are dangerously low. The lower prices fall, the less oil will be produced and the greater the chance of an oil spike," he said.
Read More:
http://www.reuters.com/article/newsOne/idUSTRE52P2D620090326
LONDON (Reuters) - The global financial crisis and collapse in the oil market have stalled vital investment in oil exploration and production and are likely soon to lead to a sharp spike in prices, an energy consultant and financier says.
Matt Simmons, founder of Houston-based investment bank Simmons & Co, argues the underlying rate of decline of the world's aging oilfields is as much as 20 percent a year and only high levels of investment can reduce that to single digits.
With credit tight and oil prices almost $100 a barrel below their highs last year, oil companies are unable to sustain previous levels of spending and the result is falling production, he said in an interview on Thursday.
"We are three, six, maybe nine months away from a price shock. We are not talking about three to five years away -- it will be much sooner," Simmons told Reuters in London.
"These prices now are dangerously low. The lower prices fall, the less oil will be produced and the greater the chance of an oil spike," he said.
Read More:
http://www.reuters.com/article/newsOne/idUSTRE52P2D620090326
Posts
No comments:
Post a Comment