The
shockwaves have yet to abate following OPEC´s decision late last week,
as indicated by energy market volatility as the week began. Brent
($71.80) and WTI ($68.33) prices continue to plummet to levels not seen
in years, with all sectors of the industry bracing themselves for
continued lower prices in the short to medium term.
As was OPEC´s explicit intention, the sectors most likely to suffer will be the more expensive extraction plays in North America, namely US fracking and Canadian oil sands. In contrast, China could well benefit greatly from the decision as it continues to stockpile its oil reserves and develop its green energy strategies and infrastructure. Sources within Bank of America Merrill Lynch are quoted as saying growth in China’s GDP would rise about 0.15 percent for every 10 percent drop in the global price of oil.
For now at least, it appears low oil prices will continue until mid-2015 at least, with dramatic consequences for global energy producers.
EU-Digest
As was OPEC´s explicit intention, the sectors most likely to suffer will be the more expensive extraction plays in North America, namely US fracking and Canadian oil sands. In contrast, China could well benefit greatly from the decision as it continues to stockpile its oil reserves and develop its green energy strategies and infrastructure. Sources within Bank of America Merrill Lynch are quoted as saying growth in China’s GDP would rise about 0.15 percent for every 10 percent drop in the global price of oil.
For now at least, it appears low oil prices will continue until mid-2015 at least, with dramatic consequences for global energy producers.
EU-Digest
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