Oils decline to about $32 a barrel in December from a record $147.27 reached in July prompted explorers to delay or halt projects, a move that will cut supplies and push prices higher as the global economy recovers, claimed analysts at TEC Associates in a memo to shareholders some weeks ago. Crude has since rebounded, gaining 52 percent this year on signs of economic growth and record production cuts by the Organization of Petroleum Exporting Countries.
Now Royal Dutch Shell Plc Chief Executive Officer Jeroen van der Veer has added fuel to the fire; the global energy industry is facing severe challenges and the world needs unconventional energy supplies to meet rising demand, he said at the Asia Oil and Gas Conference in Kuala Lumpur recently. TEC Associates are believed to have brokered many deals for clients over recent weeks and their portfolios now show a strong position in short-term oil futures.
The economy will turn, demand will come back and the overcapacity of supply will disappear, van der Veer said. He continued to explain that oil and natural gas wont be able to meet all the additional demand thats required.
Shell, Europes largest oil and gas company, forecasts that renewable sources will account for 30 percent of new energy demand, according to van der Veer. One inside source at TEC Associates claimed that their analysts were in broad agreement here and evidence of this could be seen from TEC Associates positive stance on agriculture products which are used in the production biofuels.
The TEC Associates source cited data from a Hong Kong-based thinktank which illustrates an eight straight monthly drop in the number of drilling rigs operating worldwide as explorers postpone developments.
Analysts across the board have begun to raise their oil-price forecasts on optimism the recovery in the economy will lead to increased demand for energy, but TEC Associates are said to be expanding the strategy with a longer –term view on the impact on biofuel-related investment vehicles.
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