Tags: oil | price | forty | a | barrel

Oil Companies See $40 a Barrel Ahead

Wednesday, 19 Nov 2008 11:16 AM

By Greg Brown

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

The biggest state-run oil companies seem to be bracing for $40 a barrel — a 73 percent decline from the high set only four months back.

Meeting in Beijing, oil companies around the globe reached a consensus on the floor price as they see it, according to Fu Chengyu, chief executive of China National Offshore Oil Corporation. Oil now trades at $54 a barrel.

“The consensus at the time was that everybody realized the oil price would be even lower,” said Fu at the recent meeting, reported in the Financial Times.

“Nobody knew where it would be, but most of them said around $40.”

In addition to production cuts, major new projects are being shelved, Fu said.

Even at current prices, new production would be hard to justify. Fu estimated that oil in the mid-$50s would mean a 60 percent cutback in oil project budgets at state-run oil producers.

For deep-sea projects, which involve significant technological and logistical costs, prices need be at least $60 a barrel and up to $90 just to break even, Fu said.

OPEC members have lost $700 billion thanks to falling oil, estimates OPEC President Chakib Khelil in an interview with Algerian daily El Khabar.

The cartel recently agreed to cut output by 1.5 million barrels a day. Data due out in mid-December will show whether the typically fractious cartel sticks with that target, which might open the door to more cuts.

"All members ... are very concerned about the economic situation which has worsened in the United States and Europe who have entered into a recession, followed by Japan," Khelil said.

© 2014 Newsmax. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Dianne Feinstein: Says No Place for Violence in NFL

Sunday, 21 Sep 2014 14:38 PM

Women of the U.S. Senate have taken notice and will speak up about how the National Football League has handled domestic . . .

Intelligence Officials: Islamist 'Khorasan Group' May Be Bigger Threat Than ISIS

Sunday, 21 Sep 2014 13:53 PM

The Islamic State (ISIS) may be grabbing the headlines at the moment as the United States plans to hit targets in Syria  . . .

Rep. Mike Rogers: Stop Saying No to Fighting Terrorists

Sunday, 21 Sep 2014 13:46 PM

Michigan Republican Rep. Mike Rogers says he wants to see President Barack Obama stop saying no allies who want help fig . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved