Published On: Tue, Jul 12th, 2016

Global Oil Execs Predict Steady Rise in Crude Prices during Balance of 2016

During a recent speech at the Economic Club of Washington D.C., BP chief executive Bob Dudley echoed the sentiments of other global oil leaders, predicting that the crude oil prices which have been sitting at historic lows for the past two years are likely nearing a turn-around.

Dudley said that as global supply and demand move closer toward balance, consumers can expect a gradual rise in crude oil prices during the second half of 2016, though it’s unrealistic to expect prices to soar toward the $100/barrel rates the industry once saw. Instead, Dudley predicts, consumers could reasonably expect prices to reach $50/barrel by the end of 2016 (crude is currently trading at ~$45/barrel).

Dudley’s comments echo the prediction of Khalid Al-Falih, Saudi Arabia’s energy minister, who was recently named to that role – the most powerful job in the global energy industry. During an interview last month with the Houston Chronicle, Al-Falih suggested that the turn-around in crude prices was inevitable, and the pace of price increases was merely a matter of “how fast [consumers] will work off the global inventory overhang.”

Photo/Tech collector via wikimedia commons

Photo/Tech collector via wikimedia commons

Nearly everyone will be affected by the increase in Crude prices. Americans have enjoyed very affordable gasoline prices at the pumps and those in colder climates have benefited from below-average heating fuel prices these past two years. On the other side of the Atlantic, demand has led to gas shortages in Europe … yielding price spikes and limited availability: trends which affect locals and travelers alike. Among travelers, these high prices are most sharply felt by those who have reserved rental cars for their European vacations – a popular choice due to the close proximity of many popular tourist attractions in Europe, and the relative ease with which travelers can cross international borders by car.

Many American travelers are surprised to learn that the price at the pumps in major European cities can be three times the price of what they’re used to paying back home. According to CNN Money, a traveler renting a car at Charles de Gaulle airport in Paris, France could expect to pay over $5.50/gallon to fuel their vehicle during their trip and return their vehicle with a full tank of petrol, a fact which can play a significant role in how travelers budget for and plan their vacations. CNN Money names Amsterdam as the city in Europe where petrol is currently most expensive for drivers ($6.48/gallon).

In Washington, BP’s CEO commented on a variety of topics of interest to those following trends within the energy industry. He said that while clean energy was indeed the “fastest growing” form of energy, it likely would only account for 9 percent of our total energy supply by 2035, underscoring the ongoing impact that crude oil prices will have on the global economy in the years to come.

Guest Author: Joe Hessert


September 2010 photo/Daniel Christensen

September 2010 photo/Daniel Christensen

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