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IEA says reduced upstream investment could see oil prices tighten from mid-2016. This comes as BP plans to test future upstream spending against $60/B.
With oil prices having collapsed from around $110/B in mid-2014 to below $50/B for Brent, producers have tightened their belts on spending to develop new oil and gas reserves. Fatih Birol, Executive Director of the International Energy Agency (IEA) this week warned that cuts to spending may have gone too far and that they may lead to supply tightness in years to come.
While the fall in energy prices has been a welcome boost to consumers, Mr Birol speaking at the Singapore International Energy Week, warned that softer markets are not without side-effects, with companies developing upstream or even LNG projects under pressure to cut capex and improve cost efficiency. (CONTINUED - 665 WORDS)