Investment in fresh oil production is expected to fall for the third year in a row in 2017, as the worldwide supply glut continues fostering volatility in the crude oil markets, according to the head of the International Energy Agency (IEA).
Speaking at a recent conference in Japan, Faith Birol, IEA director said:
“Our analysis shows we are entering a period of greater oil price volatility (partly) as a result of three years in a row of global oil investments in decline: in 2015, 2016 and most likely 2017. This is the first time in the history of oil that investments are declining three years in a row.”
Oil prices have climbed of late, recently reaching their highest levels since October, amid growing expectations that the Organisation of Petroleum Exporting Countries (OPEC) will reach a deal to cut production levels. However, watchers of the market think that a deal may not be quite as substantial as Saudi Arabia and members of OPEC would like.
Speaking to Reuters recently, Birol mentioned that when oil prices reach $60, a lot of U.S. shale oil will be more economical, and within 9-12 months this could result in ‘downward pressure’ on the price of oil once more.
Low oil prices pique the attention of people, countries and even the biggest oil companies like ExxonMobil, which makes Mobil Delvac SGO 75W90. This is one reason why many of them have been hesitant to reinvest in oil production.