Thursday July 27, 2017
Energy CEOs are among the worst at predicting energy prices. Here is a prime example courtesy of the WSJ Energy Update.
With interest rates at 60 year lows and gold share prices still sliding, we are likely within a low in energy and metals in the next few months.
Bear market bottoms are signaled by this kind of throw in the towel mentality. By the way Transocean RIG is profitable and trading for 22% of book value. That in itself is a ringing bell to pay attention
SHELL ON OIL PRICES: ‘LOWER FOREVER’
Shell Chief Executive Ben van Beurden coined a new phrase for describing the direction of slumping oil prices: “Lower forever,” reports The Wall Street Journal’s Michael Amon.
Mr. van Beurden was riffing on rival BP PLC CEO Bob Dudley’s “lower for longer” quote from 2015, a description that stuck as the realization set in that the oil-market slump wasn’t going to turn around soon.
But Mr. Dudley at least held out hope for a recovery. Mr. van Beurden does not.
“We have achieved reductions by cost cutting, but also by changing our company’s culture with a lower forever mindset,” Mr. van Beurden told reporters during a conference call discussing the company’s second quarter financial results.
Mr. van Beurden said oil demand would someday peak and then decline — an event sure to send prices even lower. Shell says oil demand will peak in the next 15 years.
Others, like the International Energy Agency, say it won’t happen until 2040 or later.
It was a bleak assessment of the future of oil from the leader of the world’s second-largest publicly listed oil company.
Comments