DNV GL: Oil to Hit Almost $58 Per Barrel by Year-End
January 26, 2017
The price of oil will hit almost $58 per barrel by the end of 2017, according to forecasts by senior oil and gas professionals in a new research study by energy advisor DNV GL.
When asked to predict the price of oil at the end of this year, respondents in the survey, which included 723 senior sector players, forecast an average of $57.8 per barrel.
The research outlined that confidence in oil and gas growth for the year ahead has stabilized (32 percent compared with 30 percent in January 2016) – in line with the price of oil. However, confidence in overall prospects for individual companies is down to 44 percent from 50 percent last year.
Oil and gas professionals expect investments to continue across the value chain in 2017, though at a lower level than last year as the percentage of respondents expecting to maintain or increase capital expenditure has dropped from 43 to 39 percent.
“Despite the drawn-out recovery, investments are still being planned across the value chain. In 2017 we will see broadening of business portfolios and consolidations for growth as a way of reorganizing for the future,” Elisabeth Tørstad, CEO of DNV GL – Oil & Gas, said.
A third of respondents (33 percent) said their organizations will be increasing M&A activity in the next 12 months (up 10 percent) and more than three-quarters of respondents (78 percent) expect increased industry consolidation in 2017.
Eighty-five percent of those surveyed have cost management as a top or high priority for 2017 and a majority (63 percent) see their current cost-efficiency measures as marking a permanent shift towards a leaner way of working.
Organizational restructuring (37 percent), reducing operating expenditure (35 percent), and improving efficiency from existing assets (29 percent) are the top three priorities for cost control in 2017, according to the survey.