LONDON, Sept. 17 (UPI) — Small movements in the supply and demand dynamics driving crude oil prices makes trajectory hard to predict, the chief executive at Royal Dutch Shell said.
In the four days ending Aug. 28, Brent crude oil prices increased 15 percent to $47.97 per barrel. Full-year prices are down, however, by 13 percent. Ben van Beurden, the chief executive at Royal Dutch Shell, told the BBC crude oil prices are responding quickly to macroeconomic issues.
“It is a very, very volatile business in terms of supply and demand,” he said. “The oil price responds to very small mismatches between supply and demand.”
Markets in July were influenced by debt negotiations between European lenders and the Greek government. August markets, meanwhile, were under pressure from signs of weakness in the Asian economy.
On the supply side, U.S. shale oil production tilted markets at a time when members of the Organization of Petroleum Exporting Countries kept their output steady to protect their market share.
Those issues in part led to a collapse in crude oil prices, down more than 52 percent for this date in 2014.
Van Beurden said this trend developed “on the back of just a few percent of oversupply.”
Crude oil prices dropped more than 2 percent Friday after U.S. investment bank Goldman Sachs said the price per barrel could move to as low as $20. A report last week from the U.S. Energy Information Administration said oil could be as low as $32 per barrel.
Shell’s CEO said in response to a question by the BBC the next price move is anyone’s guess.
“The honest answer to that is I don’t know,” he said.
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