World Economic Forum 2016: Crude price ‘may bounce back to $50’

For many delegates at the World Economic Forum, one item dominated: oil. As the price of the black fuel continued its slide, the chief executive of BP, Bob Dudley, made the bold prediction that it would ultimately rebound to $50 a barrel by the middle of 2016.

“We could see a price of $30 to $40 by the middle of the year… towards the end of the year it could be into the $50s,” he told the BBC, predicting that the summer driving season in the US would prompt an uptick in demand.

However, Mr Dudley also admitted that it was “not impossible” the price could go as low as $10, as some analysts have forecasted.

The International Energy Agency said earlier this week that the world could “drown in oversupply” as sanctions on Iranian oil are lifted and global demand dwindles. The IEA’s executive director, Fatih Birol, said that 2016 would be the third year in a row when oil supply outstrips demand. “I don’t see any reason why we will have a surprise increasing the price in 2016,” he said.

Bloomberg reported that the bosses of some of the world’s biggest oil companies, including Saudi Aramco, Statoil, Shell, Chevron, Total and BP had met in private to discuss ways of cutting their investment costs. The news agency said the discussion had been about the possibility of standardising exploration and production equipment. A “technical consensus” among the oil majors over equipment would squeeze down payments to suppliers such as Schlumberger, whose shares are down 22 per cent over the past year.

The Oscar-nominated actor Leonardo DiCaprio attacked the “greed” of oil companies as he picked up an award at Davos for his environmental campaigning work on climate change. “These entities with a financial interest in preserving this destructive system have denied and even covered up the evidence of our changing climate,” he told delegates.