Growing of the oil Production from North American will limit the range at 55-60 U.S. Dollars

Growing of the oil Production from North American will limit the range at 55-60 U.S. Dollars
Growing of the oil Production from North American will limit the range at 55-60 U.S. Dollars
Thursday January 5, 2017

Despite recent ostentatious forecasts from optimistic experts that oil may reach the $100 mark in the near future due to the Organization of the Petroleum Exporting Countries' (OPEC) cutback agreement, the more conservative predictions were reinforced Wednesday by analysts, which believes $55 will be the norm in 2017.

A source claimed this is because the cost of bringing on more natural gas production in the U.S. and Canada remains quite cheap, therefore it’s tough to see how we're going to get very high, elevated prices. However this forecast is hardly pessimistic even though $55 won't be enough to allow all producers (ie: U.S., shale and players in Canada's oil sands) to recover to the degree they're hoping for, and it is significantly better than what the average was through last year, which is bringing some optimism into the sector. Moreover with with reductions in operating costs that companies have realized in the last year or two, there are more plays that are going to be economic ... there's a lot of opportunity in the sector now, and there's some optimism in producers.

Whereas another analyst slightly more bullish – but again far from the $100 mark reported that oil is capped at $60 because of course $60 will unleash an increase in supply coming out of the U.S., and that the price will naturally be capped with an increase in supply. The president of American Petroleum Institute, on Wednesday called for deregulation and increased access for offshore drilling issues that incoming U.S. president promises to address in the industry's favour when he takes office later this month.  Moreover the resident of the American Petroleum Institute added that the regulatory onslaught of the last few years that has proposed or imposed some 145 regulations and other executive actions on the industry has to be re-examined and smart energy regulations has to be implemented.

On the other president  Barack Obama during his final days in office has enacted a flurry of initiatives designed to derail Trump's policy mandates, one being an attempt to put a permanent block on drilling in most of the Arctic waters north of Alaska and on the Atlantic coast from Virginia to Maine. While people from oil industry argued that opening those offshore areas for oil and gas production could create 800,000 jobs and raise $200-billion in government revenues.

Some of the analysts who forecast $100 think that high level of price will be achieved regardless of the OPEC deal and also it is said that 2017 will be a good year for crude prices. Regardless of OPEC cutting and sticking to that, the prices will be generally positive and it’s going to be on a positive trajectory for some time.


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