Oil Industry Headlines: Week of October 12
Barclay’s Capital released a report this week, saying that “The issue seems no longer to be whether oil will reach $100 a barrel, but when.” Shortly thereafter, oil passed the $90 threshold in after hours trading on Thursday after closing at $89.47 on the New York Mercantile Exchange. Platts Chief Economist Larry Chorn warned that, despite allocating $225 billion to oil field development in 2005, underinvestment in the oil and gas sector is likely to lead to a 0.8 million barrel per day reduction in spare capacity by 2010. “This shortfall could grow to 4 million barrels per day in 2011 as existing fields continue to decline and demand rises. Anticipating a demand of 90 million barrels per day in 2010, the industry needed to invest $435 billion in development drilling and production facilities ($350 billion) and refining capacity ($85 billion) back in 2005, says Chorn. But, according to recently released IEA estimates, the industry (including national oil companies) were only able to commit $340 billion with $225 billion directed to field development,” reported RigZone. Data on whether or not oil field investments have increased substantially in 2006 and 2007 is not yet available.Published Friday, October 12th, 2007 at 9:45 pm and filed under Industry News.