Oil prices projected to hit $60-$80 per barrel by 2020

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There is clear consensus that oil prices will be in the $50-60 per barrel range this year, and within the $60-80 per barrel range in 2020, according to a new survey from Wood Mackenzie.

This projection bodes well for the industry in general, and new frontiers such as the South American country of Guyana, set to begin oil production by 2020. An estimated 2 billion barrels of high quality crude has been discovered by ExxonMobil and its partners 120 miles offshore the country.

At the upward price of $80 per barrel, this would give the crude discovered so far a value of approximately $160B.

The survey, which analyzed the responses of 170 industry professionals, revealed that priorities for 2017 are focused on protecting dividends and strengthening balance sheets.

Higher risk investments, such as deepwater projects, are being screened at higher hurdle rates by the industry, according to the report, which suggested that lower risk investments, like asset M&A, are most likely to be pursued by the sector.

“The industry is very cautious right now and risk appetite is low,” Martin Kelly, Wood Mackenzie’s head of corporate analysis, said in a statement sent to Rigzone.

Wood Mackenzie’s oil price prediction is in line with a recent poll conducted by Rigzone, which placed the price of Brent Crude Oil at around $60 per barrel by the end of the year.

Source: Rigzone, with additional reporting by OilNOW.