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Oil price dive won't be forever

February 11, 2016

Both US crude and Brent have tumbled further in Asia against the background of an oversaturated market and current OPEC policies. But energy giant BP sees demand for fossil fuels rising over the next two decades.

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China oil field
Image: picture-alliance/dpa/W. Hong

US crude fell below $27 (24 euros) per barrel in Asia on Thursday against the backdrop of an exacerbated oil glut due to high US inventories and increased output from OPEC member countries.

The renewed decline came despite the weekly US Department of Energy report showing US oil stocks dropping recently, but from levels too high to change the big picture.

Brent crude for April fell 14 cents to $30.70. "Swollen crude inventories in the US are putting increased downward pressure on the price of WTI, increasing its differential to the international benchmark Brent," BMI Research said in a note.

Sun setting on Aberdeen’s oil industry

Patience required

The renewed drop in oil prices came a day after energy giant BP presented its Energy Outlook 2035. In it, the company predicted growing energy demand globally over the next 20 years.

BP noted there would no doubt be a marked decline in coal consumption mostly for environmental reasons. But it emphasized that "the slump in coal will not shift fossil fuels from their dominant role in global energy production."

The report expected gas consumption to rise by 1.8 percent, while oil demand would go up by 0.9 percent over the next two decades.

BP added that global oil supply was forecast to expand by nearly 19 million barrels per day, mainly led by growth outside OPEC.

hg/kd (AFP, dpa)