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Oil investment is expected to fall for third year in 2017

The period of oil prices volatility in 2017 is expected to be the result of three year investment shortfall

24.Nov.16 3:51 AM
By Anna Tuzova


Oil investment is expected to fall for third year in 2017
“Our analysis shows we are entering a period of greater oil price volatility (partly) as a result of three years in a row of global oil investments in decline: in 2015, 2016 and most likely 2017”, the head of the IEA(International Energy Agency) stated at the conference held in Tokio.

According to the director general of the IEA Fatih Birol, the period of profound instability will start in part because of three-year investment shortfall. As he said, “This is the first time in the history of oil that investments are declining three years in a row”, this risks complications in subsequent years.

Oil prices has grown significantly in November, because of the expectation of OPEC-led output cut, but observers think that the deal will help the difficult situation with the glut, but wouldn’t solve it.

If commodity prices reach the mark of $60, shale oil output in the USA will immediately increase the production of oil. If OPEC reduce the production, it will fall have to balance to maintain a constant prices, according to Birol.

As Nicolas Maduro said earlier, speaking to the specialists of PDVSA, the agreement on reduction of oil production will be reached inevitably.

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