According to information from business publications, the world’s largest oil and gas groups have decided not to pursue any new projects to preserve dividend payouts.
This decision from the oil giants is a correct one. They have given preference to shareholder interest and capitalization to investment expenditure. In periods of low oil prices, companies usually lower investment. In 2 or 3 years’ time this will lead to a supply deficit and a rise in prices. Consequently, oil reaching $100 per barrel is something that we can expect by 2018.
It’s worth mentioning that the market is expecting this level to be reached only by 2020. However, it’s not worth sitting and waiting for a resumption of oil prices to their former heights.
Attention:
Forecasts which are made in the review constitute the personal view of the author. Commentaries made do not constitute trade recommendations or guidance for working on financial markets. Alpari bears no responsibility whatsoever for any possible losses (or other forms of damage), whether direct or indirect, which may occur in case of using material published in the review.
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