UK Energy Companies Ideally Placed
Source: OilVoice (8/11/10)
"UK firms ideally placed to exploit increasing commodity price."
Linzi Graham, EU Commodity Sales, Barclays Capital, commented that supply and demand levels in the oil market will become increasingly mismatched, as demand growth continues to outpace supply. "Demand growth in the second-quarter of 2010 was above two million barrels of oil per day for the first time in five years and there is a structural shift in the oil world—for example China's demand is outstripping its supply by far," she added.
Key trends point to a steadily rising commodity price; decelerating U.S. output due to the suspension of deepwater drilling activities; an increasing demand for oil and a weakening supply outlook.
The research goes on to say that while oil prices are still allied to pessimism around the global economy, a steady rise in the oil price is expected, reaching $87 a barrel by the end of the year. Continued projected growth may herald a price of around $135 per barrel by 2015.
Jonathan Wilson, Barclays Corporate Oil and Gas Team's business development director said the rise in the commodity price is good news for the oil and gas sector, which would give confidence to the industry to initiate capital expenditure projects.
He added that if the deepwater drilling activity suspension in the United States was renewed by the U.S. government, following the Macondo spill, it may lead to companies looking to exploit opportunities elsewhere, including the United Kingdom Continental Shelf.