Energy
Monday, February 5th, 2024 8:31 pm EDT
Key Points
- Occidental CEO Vicki Hollub warns of an imminent supply shortage in the oil market by the end of 2025, citing a failure to replace current crude reserves quickly enough.
- Hollub highlights that about 97% of today’s oil was discovered in the 20th century, and the world has replaced less than 50% of the crude produced over the last decade.
- While the current market is oversupplied, held down oil prices despite conflicts in the Middle East, Hollub anticipates a shift in the supply and demand outlook by the end of 2025, projecting a long-term supply issue.
Occidental CEO Vicki Hollub warned that the oil market is heading towards a supply shortage by the end of 2025 due to insufficient replacements for current crude reserves. Highlighting that about 97% of today’s oil was discovered in the 20th century, Hollub expressed concern that the world has replaced less than 50% of the crude produced over the past decade. While the current market is oversupplied, holding down oil prices despite conflicts in the Middle East, Hollub anticipates a shift in the supply and demand outlook by the end of 2025, projecting a long-term supply issue. Despite the short-term demand challenges, she emphasized the impending shortage. The U.S., Brazil, Canada, and Guyana have been contributing record amounts of oil, but Hollub sees a flip in the market dynamics on the horizon. OPEC’s forecast suggests global oil demand will grow by 1.8 million barrels per day in 2025, outpacing crude production growth of 1.3 million barrels per day outside the cartel. This imbalance could result in a supply deficit unless OPEC adjusts its production cuts and increases output. As of now, WTI and Brent futures are up more than 1% this year, with WTI settling at $72.78 a barrel and Brent at $77.99 a barrel. In December, Hollub had mentioned that Occidental expects WTI to average around $80 in 2024.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/05/oil-market-will-face-supply-shortage-by-end-of-2025-occidental-ceo-says.html
