After the Crash - Oil Price Recovery and LNG Project Viability

Uyiosa Omoregie

No 35cna, SocArXiv from Center for Open Science

Abstract: Crude oil prices fell below the 2009-2014 five-year average in early September 2014. The drastic fall in price was from a monthly peak of $112 per barrel (bbl) in June 2014, falling to $62/bbl in December. Since 2016 the oil and gas market has gone through a period of rebalancing, resulting in modest recovery in prices. Oil price recovery reached a peak of $85/bbl in October 2018. Gas prices have also achieved similar modest price recovery. The industry has now entered an expansion phase: the five largest international oil companies exceeded expectations for 2018. The outlook for gas is encouraging. It is projected that gas will supply the largest share of energy demand growth, supplying over 40% of additional demand by 2035. Also, the United Nations 2015 Paris Agreement on climate change has led to a re-emphasis on gas as a ‘transition’ ‘cleaner’ fuel. A window of opportunity exists for new LNG projects to commence production in anticipation of an undersupplied market (2025-2035). LNG projects provide long and stable dividends for shareholder companies, certain risks found in tight oil and upstream projects are absent.

Date: 2019-04-10
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:35cna

DOI: 10.31219/osf.io/35cna

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