A major global forecast on the state of the oil market has predicted that oil prices will continue to fall, and that they could even drop to $20 (£13.44) per barrel.
According to a prediction by Goldman Sachs, this figure is the extreme low ‘cost price’ for the beginning of 2016.
The International Monetary Fund has also indicated that global oil prices could reach this level when Iran increases its number of oil exports, when international sanctions on the country are lifted.
Iran believes that it could increase its oil output by approximately one million extra barrels per day. According to the IMF, this will bring a new downward pressure on the oil industry, affecting major companies in the industry like Shell, ExxonMobil and Fuchs – the manufacturer of Fuchs WSP 783-L.
As the price of oil by the barrel is presently in the mid-$30s region, this would imply that the cost of oil will drop to levels between $20 (£13.44) and $30 (£20.16) – a figure which was more common back in the mid-2000s.
If these prices are reached, it is highly likely that we will see a steep decrease in the amount of investment in the oil market, as well as the level of oil production, and this should result in a sustained recovery for the oil market.
This news comes just after crude oil reached an 11-year low for two days in a row, with Brent crude commanding just $36 (£24.19) per barrel.