BHP Billiton Sees Oil Market Rebalancing in 2017
February 27 2017 - 6:20PM
Dow Jones News
By Rhiannon Hoyle
SYDNEY--The oil market is rebalancing and demand for
liquids--including crude oil, condensate, natural gas and
biofuels--should begin to outpace supply later this year, helping
to normalize global inventories, says BHP Billiton Ltd. (BHP.AU)
vice president of petroleum marketing Michiel Hovers.
Last year's deal among oil-producing nations to cut output along
with the Organization of the Petroleum Exporting Countries has
accelerated that rebalancing, Mr. Hovers said in remarks on BHP's
website on Tuesday.
BHP, the world's No. 1 miner, wants to increase its exposure to
world oil markets following a massive expansion of iron-ore mining
operations in recent years. In October, the company outlined a plan
to expand its oil-and-natural-gas business by advancing new
projects that can be developed at a fraction of the cost than
previously expected to take advantage of the projected recovery in
global energy prices.
Mr. Hovers said BHP expects "compelling market fundamentals" to
emerge in the global oil market next decade.
"Demand growth and natural field decline suggest the world will
need 30 million new barrels per day by 2025, which is equal to
roughly one third of total global supply today," he said.
BHP forecasts global demand for liquids will rise by roughly 1%
a year over the coming decade as populations swell, living
standards increase and more people in the developing world become
car owners. At the same time, it forecasts yields from producing
fields to decline at an average rate of 3-4% a year.
"In recent years, investment has been extraordinarily weak by
historical standards," said Mr. Hovers. "This phase creates the
clear potential for the world to again be short of oil--as it
periodically was prior to the U.S. shale revolution."
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
February 27, 2017 18:05 ET (23:05 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
BHP (NYSE:BBL)
Historical Stock Chart
From Mar 2024 to Apr 2024
BHP (NYSE:BBL)
Historical Stock Chart
From Apr 2023 to Apr 2024
