Yesterday, the CEO of Austria’s OMV, Rainer Seele, stated that global oil demand will grow at the slowest pace in many years in 2019 because of a softer world economy, predicting that sluggish energy markets will spur mergers and acquisitions in the industry.
He further states that there are signals from the consuming markets that the industry should prepare for slower GDP growth. And hence it will translate into tougher days. In the recent weeks, brent oil prices have been trading at around $60 per barrel, down from their 2019 peaks of $75 per barrel, as slower economic growth outweighed lower oil supplies from sanctions-hit Iran and Venezuela. Currently brent oil trades at $62.8 per barrel.
Brent Oil Price (USD/barrel) (2016 – 9.9.2019)
Source: Bloomberg, InterCapital Research
Seele also stated that expects growth in global oil demand to fall below 1 million barrels per day this year – for the first time in many years, which he predicts will continue in 2020. Seele further sthates that the industry might need to prepare for consolidation. The M&A market might return to a more healthy mode as assets become more reasonably priced
