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Economist predicts $60 oil “relatively soon”


Oil prices will jump over $60 “relatively soon,” according to Statoil chief economist Eirik Waerness, who spoke to a news media.

According to Waerness, $60 barrel is unlikely to happen as soon as tomorrow, but the goal will be met sooner, rather than later, on a 2050 timeline. A series of “surprises” have affected the recovery of oil prices over the past three years, causing previous forecasts to be inaccurate.

The fact that we have so much oil in storage for so long has been a surprise,” Waerness said. “The resilience of U.S. shale oil producers to actually step up production once prices came above $50 is a surprise. An ongoing surprise is that we keep production stable outside of the OPEC and non-US countries for so long.”

He said oil prices should tighten with the next five years, describing the slow recovery as a “patience game.” Non-OPEC nations must also cut production in order to reverse the supply glut.

“At some point this level is not sustainable,” the economist added, according to a report by

The Organization of Petroleum Exporting Countries (OPEC) agreed to cut output by 1.2 million barrels per day in November as part of an effort to reduce the crude supply glut. Oil prices initially rose above $50 when the reduction began in January, but have become bearish in recent weeks as Libya, Nigeria, the United States and other producers continue to increase output.

Brent crude slipped below $45 on Wednesday, reaching its lowest price since last November, according to Bloomberg last week.

“There’s a sea of negativity,” Maxwell Gold of ETF Securities LLC said. “This is much more a story of sentiment weighing on the markets.”

The U.S. Energy Information Administration reported a 2.5-million-barrel draw on domestic inventories on Wednesday, but the news was not enough to boost West Texas Intermediate (WTI) prices, which have fallen 22 percent from a peak in January.

14 Comments on "Economist predicts $60 oil “relatively soon”"

  1. Davy on Wed, 28th Jun 2017 6:26 am 

    We really don’t know where oil demand is going because we are not sure where the global economy is going. This is a situation most people skip when they look at any number of issues from renewables to oil. There are dangerous risks to the global economy. This risks are dispersed making no country immune from other countries issues.

    It has been amazing how the worlds coordinated efforts have maintained economic activity. It is also scary because the system we grew up with is no longer. We entered a new environment in 08 and have been quickly moving towards managed economics. This managed economics is full of moral hazards and corruption.

    No one can be sure what will happen the next time a bubble pops. Maybe the fact we are in an economic straight jacket this might prevent panic but it might make it worse. Oil is wrapped up in this situation.

    Demand destruction is evident but so are growth forces. We are in a time of turbulence. The simple fact of a growing population in the 3rd world needing cars is a force on its own but we also have the renewable revolution potentially putting a damper on oil demand. It is a mix bag on the consumption side.

    The important point is to remember peak oil dynamics are not dead. These dynamics continue to be at work. Economic cycles are surely still part of our global economy. Eventually we are going to see another crisis and this could mean a variety of oil price scenarios of high then low or maybe just a low of a crash or a high of stagflation. One thing is certain the oil complex is not healthy. The global economy is not healthy. We are not healthy people. That can’t end well.

  2. Davy on Wed, 28th Jun 2017 6:34 am 

    “Yellen: “I Don’t Believe We Will See Another Crisis In Our Lifetime”

    This is the kind of hubris that we have everywhere from the techno optimist to the central banks. None of us want to hear bad news. We have this mistaken belief in immortality and exceptionalism. No we all know death is real but the rest of life we feel a foundation under our feet that will always be there. This is something I rail against even though I wish it were true. I would be happy to have another decade of near normal but I cannot fathom how we could have more than that without major crisis of some sort somewhere.

  3. Davy on Wed, 28th Jun 2017 7:20 am 

    What happens in China drives oil and the global economy. China is the world’s engine of growth.
    “Chinese Satellite Data Hint At Ominous Manufacturing Slowdown”

    “Chinese factory activity contracted last month for the first time in nearly a year when the Caixin PMI dipped below 50, the threshold for growth. And now, early indicators for the month of June – including one satellite-based measure – suggest that there’s more pain ahead for the manufacturing sector in the world’s second-largest economy.”

  4. bobinget on Wed, 28th Jun 2017 8:37 am 

    Sixty bucks would be a Goldilocks.
    I’m triple-digits fearful.

    How much longer will it be before China, Russia and India are scrapping over Venezuela’s seemly endless tar-sands?

    In fewer years than Davy has been posting here,
    importing oil will depend on how much ‘essential to life’ goods an importer is willing to offer in return.

  5. creedoninmo on Wed, 28th Jun 2017 8:59 am 

    2050 timeline, LOL. According to the global warming folks we will be treading water in 2050. Maybe there will be 15 billion people on earth, maybe two billion, who knows.

  6. bobinget on Wed, 28th Jun 2017 9:33 am 

    Summary of Weekly Petroleum Data for the Week Ending June 23, 2017

    U.S. crude oil refinery inputs averaged 16.9 million barrels per day during the week
    ending June 23, 2017, 262,000 barrels per day less than the previous week’s average.

    Refineries operated at 92.5% of their operable capacity last week. Gasoline production
    increased last week, averaging over 10.3 million barrels per day. Distillate fuel
    production decreased last week, averaging over 5.2 million barrels per day.

    U.S. crude oil imports averaged over 8.0 million barrels per day last week, up by 140,000
    barrels per day from the previous week. Over the last four weeks, crude oil imports
    averaged about 8.1 million barrels per day, 3.0% above the same four-week period last
    year. Total motor gasoline imports (including both finished gasoline and gasoline
    blending components) last week averaged 571,000 barrels per day.
    Distillate fuel imports
    averaged 139,000 barrels per day last week.
    U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum
    Reserve) increased by 0.1 million barrels from the previous week. At 509.2 million
    barrels, U.S. crude oil inventories are in the upper half of the average range for this time
    of year. Total motor gasoline inventories decreased by 0.9 million barrels last week, but
    are above the upper limit of the average range.

    Finished gasoline inventories increased
    while blending components inventories decreased last week. Distillate fuel inventories
    decreased by 0.2 million barrels last week but are above the upper limit of the average
    range for this time of year. Propane/propylene inventories increased by 3.9 million
    barrels last week but are in the lower half of the average range. Total commercial
    petroleum inventories increased by 0.8 million barrels last week.

    Total products supplied over the last four-week period averaged 19.9 million barrels per
    day, down by 2.7% from the same period last year. Over the last four weeks, motor
    gasoline product supplied averaged 9.5 million barrels per day, down by 2.4% from the
    same period last year. Distillate fuel product supplied averaged over 3.9 million barrels
    per day over the last four weeks, up by 2.9% from the same period last year. Jet fuel
    product supplied is up 4.1% compared to the same four-week period last year.

  7. bobinget on Wed, 28th Jun 2017 9:40 am 

    The notion that inventories should set prices should be tossed out along with hay and firewood storage for predicting winter weather.

    That’s why I always read the LAST paragraph before the first.

    There is clearly a diminution in gasoline use.
    Diesel and jet fuel OTOH, are taking up some of that slack. Keep in mind fuel economy gets better
    each year.

  8. shortonoil on Wed, 28th Jun 2017 9:53 am 

    Are these the same economists who did not predict the 2014 price collapse, who did not say that inventories were going to grow, and then said that oil was going to $150? Are these the same economists who did not say that in 2017, during peak driving season, that gasoline inventories where going to increase. Might be!

  9. joe on Wed, 28th Jun 2017 10:28 am 

    Slowing global growth, even with low interest rates, a potential debt bubble in emerging markets, and central banks growing desperate to shovel more shit scrip around a jaded marketplace looking for yeild that’s not there, and I haven’t mentioned the stock market bubble yet…..

    What could go wrong?

    How will this impact oil? Who knows, but either a price hike kills consumption and helps tight oil or low prices keeps inflation down and interest rates down consumption steady. If both oil and interest rates go up in unison expect the mother of stock bubbles to pop and there ain’t nobody left to bail out anybody….

  10. MASTERMIND on Wed, 28th Jun 2017 1:36 pm 

    Shale Produces Oil, Why Not Cash?

  11. Kenz300 on Wed, 28th Jun 2017 1:57 pm 

    Go electric. Worry less about the price of oil.

  12. Apneaman on Wed, 28th Jun 2017 7:37 pm 

    “relatively soon”


    adverb: relatively

    in relation, comparison, or proportion to something else.
    “it is perfectly simple, relatively speaking, to store a full catalog entry on magnetic tape”
    viewed in comparison with something else rather than absolutely.
    “relatively affluent people”
    synonyms: comparatively, by comparison; quite, fairly, reasonably, rather, somewhat, to a (certain) degree, tolerably, passably;
    informalpretty, kind of, kinda, sort of
    “today’s puzzle is relatively easy””


    adverb: soon; comparative adverb: sooner; superlative adverb: soonest

    in or after a short time.
    “everyone will soon know the truth”
    synonyms: shortly, presently, in the near future, before long, in a little while, in a minute, in a moment, in an instant, in a bit, in the twinkling of an eye, in no time, before you know it, any minute (now), any day (now), by and by; More
    informalpronto, in a jiffy;
    dateddirectly, anon
    “we’ll be there soon”
    “it’s a pity you have to leave so soon”
    synonyms: early, quickly, promptly, speedily, punctually More
    “how soon can you get here?”
    earlier, before, beforehand, in advance, ahead of time;
    “he should have done it sooner”
    used to indicate one’s preference in a particular matter.
    “I’d just as soon Tim did it”
    synonyms: rather, preferably, by preference, by choice, more willingly, more readily
    “I would sooner stay”

    wea·sel words

    “A weasel word, or anonymous authority, is an informal term for words and phrases aimed at creating an impression that a specific or meaningful statement has been made, when instead only a vague or ambiguous claim has actually been communicated.”

  13. Anonymous on Fri, 30th Jun 2017 12:41 pm 

    Shale is noting going to let prices get so high.

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