A barrel of oil to 380 euros in 10 years?

PARIS (Reuters) - A barrel of oil could cost $ 380 in ten years, almost eight times more than today, estimates the investment bank Ixis-CIB in a study published Monday.

"By analogy with the oil shocks of 1970 years, it does not seem unreasonable to predict a price 380 dollars a barrel for oil in 2015," write the authors of the study, Patrick Artus and Moncef Kaabi economists.

They consider, on the contrary, "very conservative" and "completely unreasonable" the hypotheses according to which the price of a barrel of crude, which hovers around 50 dollars today, could come back between 30 and 40 dollars in the ten years to come.

Currently, world oil consumption (84,3 million barrels per day) remains below the maximum production capacity known (87 million bpd).

By extrapolating current trends in world oil consumption, Ixis-CIB economists estimate that it will be around 108 million bpd in 2015 and will be 8% higher than production capacities estimated at 100 million bpd.

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According to them, several factors explain this evolution:

- a slight increase in production capacity resulting from a continuous decrease in the new oil reserves found;

- an increase in oil consumption faster than that of world GDP, in particular with the prospect of a significant increase in demand from China;

- the relatively slow development of alternative energy sources.

"Over the ten-year horizon, we can consider that energies substitutable for fossil fuels (return of nuclear power, hydrogen, etc.) will not have developed much," write Patrick Artus and Moncef Kaabi. “The world will therefore still depend on the usual forms of energy resources. "

According to the econometric calculations they cite, the elasticity of oil demand with respect to the price of a barrel will be very low under these conditions: a 25% increase in the price of crude would only lead to a reduction of 1% in Requirement.

"To reduce global demand for oil by 8% in 2015, we would therefore need, from 2005 to 2015, a 6,9-fold increase in the real price of oil," they add. This gives, taking into account annual inflation of 2,5% in the United States, "a nominal oil price of 380 dollars per barrel in 2015".

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Source: Reuters

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