Wednesday, April 29, 2015

Oil Market Fundamentals Point to Prices in the $80 a Barrel Range


 
Statoil's (STO) head of U.S. Development and Production Bill Maloney says Mexico's liberalization of oil drilling regulation could open a great deal of new opportunities but there is still a lot of uncertainty about how agreements will be structured. Maloney said, 'The potential is there. we’re cautiously optimistic. Mexico has to compete with Statoil dollars. I have to justify the investments I want to make. We look forward to doing business there if the business case works out.' Statoil has already trimmed capital spending by 10-percent because of the decline in oil prices but expects prices to return to the $80 a barrel range, though exactly when remains unclear. Maloney said, 'The recipe for us and our competitors is to maintain strength through the cycle, continue to invest in the cycle, but when the rebound is going to come, I don’t know. I do firmly believe it will be there.'

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