Norway's biggest bank forecasts an increase in oil prices more than 2 times in the second half of 2016. According to DNB ASA, quotations will reach $ 65 per barrel for Brent variety. Just the other day a 12-year low was set at $ 28 per barrel. Ottar Erttsayd, managing director of DNB Markets, finds that in 2017 the supply and demand balance will be different.
The forecast is hardly impartial. DNB ASA is the largest bank of the most significant oil and gas exporter, and almost the only resource-based economy in Europe: Norway. Norway’s oil-heavy stock exchange has slumped with the oil drop, with the OBX index down 23 per cent from a high in 2015.
Because of the low price of oil, Norway is forced to spend untouchable pension funds. Oil workers in Norway are trying to look to the future with optimism. Statoil goes against the trend and is investing $7 billion in the development of offshore field "Johan Kastberg". The project is complex, involving the construction of large floating objects in conjunction with the Italian Eni and work at low temperatures.
The head of DNB markets emphasized their optimistic forecast for prices will be materialized in the second half of 2016. Neither the current market price of North Sea variety Brent, nor the current value of the OBX looks promising. In the short term, all could be worse, said Ottar Erttsayd. This view is shared by BP, for which the North Sea is also important. Robert Dudley, head of British Petroleum, said that he expect the price to drop to $ 10 per barrel in the short run.
Before Mr. Dudley such low prices were voiced only by the bank Standard Chartered. However, BP admits that it can not continue this way. Robert Dudley believes that by mid 2016 prices will stabilize at the level of $ 30-40 per barrel by the end of the year, even growth to $50 is possible. The key positive factor is the increase in demand for oil in China and the United States.