Olivier Rech, head of energy research at Beyond Rating, comments on recent oil price evolution
Interviewed by French newspaper La Tribune, Olivier Rech highlights the main drivers of the current “low” price of oil, the lowest since April 2013 at 90$ per barrel.
The global economic slowdown (deflation in some OECD countries, lower growth in emerging markets) as well as the on-going production of shale oil in the US are the main drivers to be found. The strengthening of the dollar increases this trend, which is not so acute in other currencies. Further economic sluggishness coupled with a mild winter could increase this price decrease in the coming months. Below a certain price floor however, and if US real interest rates were to increase simultaneously, shale oil exploitation in the US might become unprofitable.
Read the full article here on La Tribune website.