Higher oil prices are inevitable, says PIRA

Higher oil prices are inevitable because surplus stocks are substantially declining, the world has no spare capacity, and sooner or later prices will have to increase to stop destroying supply and create supply, PIRA Energy Group said in a report.

It said crude oil prices are now trading in a new higher $45-$55/Bbl range, but it is not high enough to bring forth incremental supply.

“If lead times to bring on significant shale crude output are six to nine months and $60+/Bbl oil is required then even PIRA’s call for much higher prices is at least $5/Bbl too conservative,” the report said.

According to PIRA, the longer prices stay where they currently are the less supply and shorter the market will be later.


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