Royal Dutch Shell CEO Jeroen van der Veer says the oil market is setting itself up for the next rise, though that may take years.
In the short term, the recession could last longer than a year, continuing to depress oil prices, he tells the Financial Times.
“We have said for quite some months that no one knows how long this recession will last,” van der Veer says. “As a company, we’re not in the forecasting business, so we’re assuming that the economic downturn will last longer than a year.”
But a few years from now the picture will be quite different, he says. “We’re convinced the business environment for energy will be quite strong.”
Population growth will fuel the rally, he says, noting that global population is expected to increase 50 percent, to 9 billion people, in the next 40 years.
“All people like to have electricity and to transport themselves,” van der Veer points out. “So we see rising demand for energy.”
Supply won’t grow in tandem, as it’s becoming more difficult to extract oil and some energy companies are cutting investment, he says.
“I’m concerned that industry under-invests, which leads to the next price spike some years out.”
Qatari Oil Minister Abdullah bin Hamad al-Attiyah also thinks it will take a while for crude to kick back up.
“Fifty dollars a barrel is reasonable for the world economy now,” he tells Bloomberg.
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