Brent oil price trend will drop, says Eni's Descalzi

(AGI) Vienna, June 3 - The price trend for Brent oil isdestined to fall below that of the last five years, Eni's CEOClaudio Descalzi stated during the 6th Opec InternationalSeminar. "The drop in oil prices caused different dynamics tothose in the past, because every production cut to maintainprices can be immediately compensated by the new, addedcapacity of shale oil," he said. "Taking this key element intoconsideration, we should see W-shaped price fluctuations with atrend in a lower range for Brent oil than the last fiveyears'." Businesses in the oil and gas

(AGI) Vienna, June 3 - The price trend for Brent oil isdestined to fall below that of the last five years, Eni's CEOClaudio Descalzi stated during the 6th Opec InternationalSeminar. "The drop in oil prices caused different dynamics tothose in the past, because every production cut to maintainprices can be immediately compensated by the new, addedcapacity of shale oil," he said. "Taking this key element intoconsideration, we should see W-shaped price fluctuations with atrend in a lower range for Brent oil than the last fiveyears'." Businesses in the oil and gas sector will struggle togrow in this climate of weaker and more variable prices,Descalzi said, adding that in recent years companies couldstill rely on high prices and therefore make large investments."Costs in exploration and production reached almost 700 billiondollars in 2014, around 250 percent more than 10 years earlier,while global production only rose by 15 percent in the sameperiod," he noted. "Looking at the major companies, we will seea production drop of approximately 10 percent despiteinvestments increasing over 200 percent." Companies have placedtheir bets on expensive projects with a breakeven point of over90 dollars per barrel, he said. (AGI).