Friday, December 26, 2014

Saudi Arabia is Expecting an Oil Price of $80 a Barrel in 2015

Brent oil is now near $60 as  OPEC’s refuses to cut production. Trading was less than one-third of the 100-day average. BUT, according to Bloomberg, John Sfakianakis, a former economic adviser to the Saidi Arabian government, says  is expecting an oil price of $80 a barrel for 2015.They are certainly basing this on the idea that the low price will knock high cost producers out of the game in early 2015.

However, fighting in Libya may also add some support to the price, if the Libyan supply is cut off for an extended period.

“The situation is getting worse in Libya and we can pretty much write off supplies from there,” said Olivier Jakob, managing director at Petromatrix GmbH in Zug, Switzerland. “Even without an OPEC supply cut, we are getting one from Libya.”

The fighting in Libya caused crude output to decline to 352,000 barrels a day, Mohamed Elharari, the company’s spokesman, said yesterday. That compares with daily production of close to 1.6 million in 2011.


  1. He means Arabia hopes oil goes back to $80. but really if oil goes back to $80 then Iran, Russia and the US frackers become profitable again then in 2016 then price begins to slide down again.

  2. I have a friend who is a financial adviser to several west Texas drillers. He's told at $100/bbl, fracked wells cover their entire cost of production in two to four weeks. The rest is gravy.