Oil prices expected at around $65-$70 through 2023

Long-term expectations for the average price of Brent crude remain anchored around $70 per barrel, close to the $72 average realized in 2018. (Reuters)
Updated 16 January 2019
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Oil prices expected at around $65-$70 through 2023

  • Despite the recent slump in oil prices, forecasts have edged down by less than $5 per barrel compared with the last annual survey conducted at the start of 2018
  • Brent prices in 2019 are expected to average $65 per barrel, unchanged from surveys in 2016, 2017 and 2018

LONDON: Oil prices are expected to oscillate close to current levels well into the next decade, averaging around $65-$70 per barrel through 2023, according to an annual survey of energy professionals conducted by Reuters.
Despite the recent slump in oil prices, forecasts have edged down by less than $5 per barrel compared with the last annual survey conducted at the start of 2018, and have changed little over the last three years.
Long-term expectations for the average price of Brent crude remain anchored around $70 per barrel, close to the $72 average realized in 2018.
The results are based on the responses from just over 1,000 energy market professionals to a poll conducted between Jan. 8 and Jan. 11.
Brent prices in 2019 are expected to average $65 per barrel, unchanged from surveys in 2016, 2017 and 2018.
In 2020, Brent is also expected to average $65 per barrel, revised down by $5 or less compared with prior surveys.
Far fewer respondents now see any risk of prices spiking to $100 or more by the end of the decade as a surge in US shale output has eased fears of supply shortages.
The proportion of respondents expecting prices to average more than $90 in 2020 has fallen to just 3 percent this year, from 13 percent at the time of the 2016 survey.
By 2023, prices are still expected to average $70, with most forecasts between $60 and $80, which suggests most energy professionals think there will be enough production developed at this level to meet consumption growth.
Among survey respondents, 26 percent are involved directly in oil and gas production (exploration, drilling, production, refining, marketing and field services).
Most of the rest work in banking and finance (18 percent), research (9 percent), professional services (9 percent), hedge funds (8 percent) and physical commodity trading (6 percent).
The results from respondents involved directly in the oil and gas industry were similar to those in other sectors.
Oil and gas insiders and those outside the industry have more or less the same outlook for prices in 2019 and 2020.
Insiders are marginally more bullish than outsiders on prices, but the difference is just $1.50 per barrel in 2019, rising to $3.50 by 2023.
Respondents exhibit more certainty about prices this year and next compared with subsequent years, which is natural given that uncertainty tends to increase over longer-time horizons.
Responses for 2019-2020 are tightly clustered, while expectations for 2021-2023 exhibit more variation. Even so, few respondents expect average prices to fall below $55 or rise above $85 in the next five years.
The level of uncertainty, as measured by the standard deviation of responses, has remained constant over the last four surveys.
Short-term uncertainty has remained little changed, with the standard deviation of responses for the first forecast year at $8 in 2019, compared with $7 in 2018, $6 in 2017 and $8 in 2016.
Long-term uncertainty has also held constant, with the standard deviation of forecasts for the fifth year at $19 in 2019, compared with $18 in 2018, $18 in 2017 and $20 in 2016.
There is no significant difference between oil and gas industry insiders and outsiders, with the level of uncertainty similar in both groups for both short-term and long-term prices.
Overall, most respondents expect the oil market to remain comfortably supplied in the foreseeable future, with prices oscillating around the current level or a little higher and relatively moderate volatility.


Workplace messaging startup Slack to list on Wall Street

Updated 26 April 2019
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Workplace messaging startup Slack to list on Wall Street

  • The direct listing will raise no cash for the California-based firm but will enable employees and early investors to sell their shares in the fast-growing tech firm
  • Slack, which has become a popular application for businesses looking to move away from email to real-time messaging, said it had some 10 million users at the end of January

WASHINGTON: The workplace messaging startup Slack filed documents Friday to list its shares on the New York Stock Exchange, the latest of a group of richly valued tech enterprises to look to Wall Street.
The “direct listing” will raise no cash for the California-based firm but will enable employees and early investors to sell their shares in the fast-growing tech firm.
Slack, which has become a popular application for businesses looking to move away from email to real-time messaging, said it had some 10 million users at the end of January.
That included 88,000 paying customers and 65 of the Fortune 100 firms.
“Our vision is to make people’s working lives simpler, more pleasant and more productive,” Slack said in its filing with the Securities & Exchange Commission.
“Slack is a new layer of the business technology stack that brings together people, applications, and data — a single place where people can effectively work together, access hundreds of thousands of critical applications and services, and find important information to do their best work.”
Slack, which has users in 150 countries, has raised more than $1 billion from investors with the latest round valuing the company at $7.1 billion, making it one of the most richly valued “unicorns” — startups with private funding worth at least $1 billion.
In its first release of financial data, Slack said it lost $141 million in the 12 months to January 31 on revenue of $400 million.
Created in 2013, Slack has been a leader in the new segment but faces competition from the likes of Microsoft, Facebook and others offering workplace collaboration tools.
Analysts say Slack has found a niche, especially among small- and medium-sized businesses.
Its clients include software giant Oracle, the French luxury goods maker LVMH, Liberty Mutual insurance and the NASA Jet Propulsion Laboratory.
It is available in eight languages and gets about one-third of its revenue from outside the United States.
Slack’s chief executive and founder Stewart Butterfield was part of the team that started the photo-sharing service Flickr.
The direct listing, which was also used by the streaming music giant Spotify, does not add fresh capital to the firm but enables free trading of shares while avoiding the underwriting costs of a public offering.
Slack will trade under the symbol “SK.”