Oil is unlikely to return to $80 a barrel before the end of the decade, despite unprecedented declines in investment, as yearly demand growth struggles to top 1 million barrels per day, the International Energy Agency said on Tuesday.
In its World Energy Outlook, the IEA said it anticipates demand growth under its central scenario will rise annually by some 900,000 barrels per day to 2020, gradually reaching demand of 103.5 million bpd by 2040.
The drop in oil to around $50 a barrel this year LCOc1 has triggered steep cutbacks in production of U.S. shale oil, one of the major contributors to the oversupply that has stripped 50 percent off the price in the last 12 months.
“Our expectation is to see prices gradually rising to $80 around 2020,” Fatih Birol, the executive director of the IEA, told Reuters ahead of the release of the report.
“We estimate this year investments in oil will decline more than 20 percent. But, perhaps even more importantly, this decline will continue next year as well.”
“In the last 25 years, we have never seen two consecutive years where the investments are declining and this may well have implications for the oil market in the years to come.”
Oil companies have grappled with the downturn and a “lower for longer” price outlook by slashing spending, cutting thousands of jobs and delaying around $200 billion in mega-projects around the world.
The IEA estimates investment has already fallen by 20 percent this year.
Higher-cost producers in Canada and Brazil, as well as the United States are likely to fall victim to low oil prices faster than most exporters, but these declines could be offset by supply growth in Iraq and Iran.
Devon Energy Corp (NYSE:DVN) stock edged higher by +1.66% to close Tuesday’s session at USD 47.76. The company’s shares hovered between USD 70.48 and USD 36.01 (marking a new 52-week high/low) during the session. The stock traded with the volume of 5.13 million shares, which was below its 3 month average volume of 5.51 million shares. Over the last 5 days, Devon Energy Corp‘s shares have rose by 5.62% and in the past one month it has moved up 8.57%. Devon Energy Corp(NYSE:DVN) announced core earnings of $316 million, or $0.76 per diluted share, for the third quarter of 2015. This level of earnings generated cash flow from operations of $1.6 billion in the third quarter, a 41 percent increase compared to the second quarter of 2015. “Devon delivered another outstanding operational performance in the third quarter,” said Dave Hager, president and CEO. “Our strategy of operating in North America’s best resource plays, coupled with a focus on delivering best-in-class execution, continues to generate top-tier results.
ENSCO PLC (NYSE:ESV) close Tuesday’s session at USD 18.29. The shares of the company fluctuated in the range of USD 41.99 and USD 13.26 (marking a new 52-week high/low) during the session. A trading volume of 5.07 million shares was recorded, which was less than its 1 month daily average volume of 7.00 million shares. Over the three months, ENSCO PLC‘s shares have surged by 2.51% and in the past one year, it has lost -52.12%. ENSCO PLC(NYSE:ESV) announced that its Board of Directors has declared a regular quarterly cash dividend of US$0.15 per Class A ordinary share payable on 18 December 2015. The ex-dividend date for this payment is expected to be 3 December 2015, with a record date of 7 December 2015. Ensco uses its website to disclose material and non-material information to investors, customers, employees and others interested in the Company. To receive regular updates on Ensco news or SEC filings please sign-up for Email Alerts on the Company’s website.
Continental Resources, Inc. (NYSE:CLR)‘s stock decreased by -0.17% to close Tuesday’s session at USD 35.60. The Company’s shares oscillated in the range of USD 22.56 and USD 58.48. A total of 5.06 million shares exchanged hands, which surpassed its 1 month daily average volume of 4.56 million shares. Over the last five days Continental Resources, Inc‘s shares have surged by 3.37% and in the past six months it has moved down -23.82%. Continental Resources, Inc.(NYSE:CLR) announced third quarter 2015 operating and financial results. Continental reported a net loss of $82.4 million, or $0.22 per diluted share, for third quarter 2015. Adjusted net loss for third quarter 2015 was $43.5 million, or $0.12 per diluted share. EBITDAX for third quarter 2015 was $472.2 million, compared with EBITDAX of $947.6 million for third quarter 2014. Definitions and reconciliations of adjusted net income and net loss, adjusted earnings per share and EBITDAX to the most directly comparable U.S. generally accepted accounting principles (GAAP) financial measures can be found in the supporting tables at the conclusion of this press release.