Despite warnings, the price in oil has increased due to slowing of U.S. drilling activity and escalating conflict in the Middle East. This has led to a rally of Brant Crude by 24% since the low of $42.44 on 24/08/2015 leading to Shell’s chief executive, Ben van Beurden, to comment that he saw “the first mixed signs of recovery” in oil prices.
Goldman Sachs has said the gains in oil prices are merely a blip and that a glut of crude may keep oil prices as low as $20 per barrel for up to 15 years with the Goldman analysts stating “We continue to view the oil market as oversupplied and with low prices required to achieve the sufficient rebalancing in 2016”.
In response to the falling rig count, which fell to 605 in the week ending 9th October and are the lowest since July 2010, Goldman Sachs commented saying “The current rig count is pointing to U.S. production declining sequentially between 2Q15 and 4Q15 by 255,000 barrels per day”.
Safiya Bashir on 12/10/2015