Oil prices continue to ratchet upwards – good news for the industry, not such good news for consumers.
The key for companies to start investing again will be when they see this price rally continuing for a few years and an oil price high enough to generate good profits.
This report suggests that people are now looking at oil prices above $60 per barrel next year which would certainly provide sufficient margin for investment.
Pretty much every single fundamental that we have points to those commodity prices going up, not down,” Ryan Sitton, one of three elected members of the Texas Railroad Commission
To give you some idea of the impact that low prices have had, the article points out
In Texas alone, Sitton said, state regulators are processing less than a third of the oil and gas well permits they did just two years ago, highlighting the wariness companies have to drill and pump more.
However, not everyone is so optimistic, another commentator stated;
Investors don’t expect prices to climb above $53 at all for the rest of the decade, and most shale oil producers in the United States have begun planning for what they are calling a “lower for longer” price scheme
These differences of opinion often come about as a result of different agendas, which has always been a problem in the Oil industry.
Fingers crossed things are starting to look up.
