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$20 oil no longer mirage as world confronts 12-year low

Oil price Drop-thenewscompanye-News® | The NEWS Company…Tokyo, Jan 13, 2016 : The world mostly ignored Ed Morse 11 months ago when the head of commodities research at Citigroup said oil could drop as low as $20. It’s paying attention now that crude has tipped below $30.

BP Plc slashed 4,000 jobs, Petroleo Brasileiro SA slashed its spending plan and Petroliam Nasional Bhd. warned that it faces several tough years before crude futures in the U.S. sank into the $20s for the first time in more than 12 years. Morse, who wrote in a Feb. 9 research note that oil could fall “perhaps as low as the $20 range for a while,” said Tuesday in Calgary that the world is now “confronting $20 oil.”

“The $20 number is something you have to talk about,” Morse said. “When you’ve seen a $10 price slide and WTI is trading just slightly above $30, the likelihood is fairly great. Clearly oil markets cannot maintain a price at below the $30 level for very long. The question is how much longer.” West Texas Intermediate fell as low as $29.93 a barrel before settling at $30.44 Tuesday, the lowest level since December 2003.

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Rajowan Syed

Rajowan Syed

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