Daily Management Review

Oil giant forecasts oil prices to fall sharply for years to come


Oil giant Exxon Mobil has sharply worsened its commodity price forecast. As The Wall Street Journal writes, the American oil concern has made a forecast for the next seven years.

Brian Katt
Brian Katt
According to the company, the impact of the coronavirus pandemic on commodity markets will continue for many years: we should not expect any rapid stabilization of the situation. 

According to Exxon Mobil, the expected oil price level should be reduced by 11-17%.

At the same time, the company representative did not say what exactly the management expects.

Last year in 2019 Exxon Mobil predicted the average price of Brent oil at $62 over five years. By 2026-2027, the price was expected to rise to $72 per barrel.

At the same time in the summer of this year 2020 Exxon lowered its forecast to $50-55 per barrel over five years, in 2026-2027 - to $60. 

The publication notes that oil sellers are increasingly faced with growing competition from renewable energy sources. In particular, the tone is set by the growing popularity of electric cars.

The oil market is also under pressure from tighter regulation: it is aimed at combating global climate change.

Exxon Mobil itself has been forced into multi-billion-dollar debt as a result of the economic crisis and the pandemic. Only in April this year - for the second time since mid-March - did Exxon Mobil issue corporate bonds. The last issue attracted $9.5 billion.

source: wsj.com