The boss of British oil company British Petroleum (BP) has made waves by commenting that the price of oil could fall as low as $10 (£7.04) per barrel.
Speaking at the World Economic Forum in Davos last Thursday, Bob Dudley told Kamal Ahmed of the BBC that it was “not impossible” that oil could fall to the $10 7.04 mark – something which was previously forecast by Standard Chartered this month.
However, Dudley thinks that, if prices were to fall so low, it would be a short-term, unsustainable thing. He said:
“We could see some real volatility in the first quarter [and] second quarter, and then, around April or May, as the stock drawdowns [in preparation] for the summer driving season in the northern hemisphere, then I think that given the rise of demand in China and North America… prices would start on an upward trajectory”.
Dudley went on to predict a price of between $30 (£21.14) and $40 (£28.19) by the middle of the year, with an eventual rise to as much as $50 (£35.24) or more as the end of the year approaches.
Oil prices falling so low may seem unthinkable but with the latest data from the American Petroleum Institute showing that another 4.6 million barrels in reserves has been built in the last week, there is every chance that $10 oil could be a reality in the near future, thus likely having a knock-on effect on the prices of oil-based products like Q8 Dynobear 32.