Colver Technologies says OPEC’s forecast of a balance in oil prices in the second half of 2015 is dependent upon a meaningful increase in demand.
Colver Technologies says that a recent OPEC forecast of a return to balance for oil prices in the second half of the year is unlikely to materialize without a meaningful uptick in global demand for crude.
“It’s clear that US shale production hasn’t slowed as much as the Saudis and Kuwaitis had hoped and the supply-side readjustment their strategy was aimed at forcing could take a lot longer,” said Gus Stuyvesant, Chief Operating Officer at Colver Technologies.
Demand in China, the world’s biggest net importer, is at odds with OPEC’s forecast with the country’s leaders forecasting growth at a mere 7% in 2015, the lowest for more than two decades. “With America producing large quantities of its own shale oil, there is little in the way of support for OPEC’s prediction. The only thing that could make a difference is more monetary stimulus from the Federal Reserve,” added Stuyvesant alluding to the widely-held belief that much of crude oil’s time above $100-a-barrel was as a result of excess liquidity looking for a home in asset prices.
Crude has slumped by more than half since June 2014 and with neither OPEC nor non-OPEC producers willing to cut production, prices are at the mercy of demand-side fundamentals. OPEC produced 30.6 million barrels in February which is an increase of 163,000 barrels a day mostly from Saudi Arabia.
Colver Technologies says it expects demand to remain subdued as deflationary pressures mount in the US and elsewhere. “The only chance of a recovery in oil prices rests with further monetary stimulus on a large scale,” concluded Stuyvesant.
About Colver Technologies:
Colver Technologies’ modular GTL systems revolve around the Fischer-Tropsch reactor, a conversion technology developed in the 1920s by Franz Fischer and Hans Tropsche in Germany in 1925. It facilitates the production of significantly cleaner-burning liquid fuels like diesel and jet fuel from natural gas that contains no sulfur. We are committed to doing our part to drive uptake of GTL fuels as global efforts to reduce emissions increase and have invested heavily to ensure the continuing development of this highly attractive alternative to conventional energy production.
Contact Colver Technologies:
Longzhimeng Asia-Pacific Center
22 Pangjiang Street
Dadong, Shenyang, Liaoning