A look into 2020: Oil at $180 a barrel?

A prediction that the price of oil could rise 50% this decade as global demand exceeds supply has drawn no shortage of opinions from people with professional interest in the matter, The Houston Chronicle reports. A Barclays research report issued last week asserted that oil produced from shale and other formations won’t be sufficient to meet growing global demand as production from older fields declines. Barclays forecasts the shortfall could push prices for Brent crude, the global benchmark, to $125 a barrel sometime next year and possibly to $180 by 2020. Brent rose $1.23 to $115.80 a barrel in Monday trading on the London-based ICE Futures Europe exchange. U.S. benchmark crude finished at $96.47 in Friday trading, with the markets closed Monday for Labor Day. Challenging the notion that “sluggish economic performance plus shale oil must equal a rapidly loosening market,” Barclays observes that “While oil output is strong in the U.S., it has slumped elsewhere.” While some analysts concur with Barclays’ assessment that supply will decline, others say its projections underestimate the effects of shale technology that has made once-inaccessible oil and gas economical to produce. Others questioned the report’s assessment of the potential of new fields and of the industry’s ability to integrate them into the supply chain. Read the full story here.