At what pace will oil be challenged?
The sharp oil price rise since 2003 has revived interest in oil. Oil companies are jostling to secure access to new reserves in Africa, Asia and Latin America. Protectionism and political unrest have curbed investment activity in many areas with cheap, producible, conventional oil reserves. This, coupled with high oil prices, has triggered the innovation of new technology, turning unconventional reserves previously seen as unprofitable into financially viable fields.
What should worry the oil producers the most: the sharp increase in new production capacity worldwide – the intensified competition on the supply side or the changes in consumers’ choice of energy source (triggered by the high oil prices)?
Thina Margrethe Saltvedt, Nordea Markets’ senior macro oil analyst and global commodities strategist has published a detailed analysis on these issues – go to Nordea Markets newsroom to read it in full.