Houston, Texas – Energy executives expect oil prices to remain volatile, with most predicting crude oil to exceed $121 per barrel, according to a survey by the KPMG Global Energy Institute.
The survey polled 550 financial executives from global energy companies in April. Of them, 32 per cent think 2011 U.S. crude oil prices will peak between $121 and $130 per barrel. One-third of executives see even higher prices, with six per cent expecting $151 per barrel or more by the end of the year. Only 35 per cent think current prices are near the high they expect for this year.
“While we have seen some very recent declines due to selloffs, these variations reflect persistent instability, and our survey findings confirm that we may not have seen peak levels on crude,” said John Kunasek, executive director for the KPMG Global Energy Institute. “Energy leaders tell us continued volatility will be driven by underlying issues such as regulation, geopolitical concerns and supply disruptions, as well as escalating energy demand. But the good news is that energy executives tell us they are significantly increasing investment in a range of alternative energy sources and see shale factoring strongly into meeting the world’s future energy needs.”
Shale gas/oil was most frequently cited by executives as the alternative energy source that will win the most significant investment, with 62 per cent expecting shale oil and/or gas to continue to have a transformative impact on meeting the world’s energy needs. Other sources that would see increased research and development investment, in order, were solar, wind, clean coal technologies, biodiesel and chemically-stored electricity, such as batteries and fuel cells.
The majority of executives said the regulatory restrictions resulting from the Gulf of Mexico incident have had no impact on their companies’ offshore exploration, but 12 per cent said their companies have increased emphasis on non-traditional explorations such as shale, and 10 per cent have increased onshore drilling. Eight per cent have shut down U.S. rigs and moved to other geographies.