Tags: Shell | Oil | CEO | prices

Shell Oil CEO: Oil Price Set for Long-Term Rise

Wednesday, 21 March 2012 11:47 AM

Shell Oil CEO Peter Voser says oil's long-term price trend will only go in one direction, and that’s up.

"These volatilities are short-medium term. In the longer term we will get back to normal market-driven pricing, which is really a supply-demand function," Voser told CNBC.

"Longer term you will see demand rising and we will need all investments to cope with that demand. In the very long term we will see prices going up because of high demand and as it gets more expensive to get the resources out of the ground."

According to Voser, the key risks for oil companies in 2012 are inflation in costs and a downturn in the global economy.

“A lot of investments are being done and in some areas the cost base is rising,” he says. ”If commodity prices stay very high, that will impact the economy over time and slow things down.”

Shell’s outlook for 2012 is positive.“2012 should be a good year,” he says.

“We have growing production because of major projects coming on stream, and we have high commodity prices which will give us large cash flows that will allow us to invest in future growth whilst paying a competitive dividend.”

The Seattle Times reports that, according to the International Air Transport Association, the global aviation industry could run up losses of over $5 billion this year if oil prices spike by more than anticipated.

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Wednesday, 21 March 2012 11:47 AM
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