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Oil industry now worried about peak demand not peak production, says strategist 2017-09-13
oil industry worry
Oil prices are being weighed down by concerns we have reached the limits of demand which is crippling valuations more than other factors such as the threat from electric cars and national policies geared at banning vehicles running on petrol and diesel in the future, says RBC's chief commodities strategist.

"We went from a situation pre-U.S. shale boom where we were talking about peak production, now we're talking about peak demand," Helima Croft told CNBC on Tuesday.

"For U.S. shale producers…when it's $45 no-one is really happy but you get to $50 and they're willing to hedge their production so there's a question of 'is this a cap on near-term prices'?" she added, referring to a WTI price of $50 as being the "iceberg of U.S. production".

This is problematic for the countries which need prices to be in the sixty-plus U.S. dollar range, says Croft, who says that the key goal of the agreement between OPEC and non-OPEC members to limit output which is set to expire in March 2018 was to push prices above $60.

"Certain countries do need $60s for their policies," she explained, pointing to next year when the participants need to decide whether or not to renew the agreement for a third term.
--News from www.cnbc.com
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