As quoted in a Bloomberg report, Dudley observed that “global supply and demand recently have moved toward a better balance, and we expect this trend to continue into the second half of 2016 and probably reaching a balance by the end of the year on a daily basis.” Dudley offered his comments in a speech to the Economic Club of Washington, D.C.
As stockpiles are drawn down, oil prices will probably hit $50/bbl by the end of the year and reach $50 to $60/bbl next year, Dudley added.
Crude prices in New York have rebounded by about 90% since hitting a 12-year low in February, hovering near $50/bbl, as US output has declined and disruptions in Nigeria and Canada pared supplies.
The decline in crude oil prices since mid-2014 has forced BP and other producers to slash spending and defer new projects. That approach is expected to continue even as BP works to replenish naturally declining reserves.
“We’re not expecting the days of $100 oil to return anytime soon, so we must maintain our discipline and continue to improve our productivity or we won’t survive,” Dudley was quoted to say. “We’ve got about 40 projects that look economic between now and the early 2020s that we can see.”