Home / Oil & Energy / Oil & Companies News / I’m worried oil could go above $100 by 2020, says CEO of oilfield service giant Core Laboratories

I’m worried oil could go above $100 by 2020, says CEO of oilfield service giant Core Laboratories

The long-term climb in oil prices is concerning even top oil-service executives.

With U.S. West Texas Intermediate crude at $74.11 a barrel and global supply shortages showing no signs of abating, chieftains like Core Laboratories President and CEO David Demshur are getting worried that if the world’s demand for oil isn’t met, prices could skyrocket to dangerous levels.

“If you look at domestic activity here in the U.S., [it’s] fabulous,” Demshur told CNBC. “All of our operations here in the U.S. are doing great. Internationally, year over year, activity level’s only up 1 percent. This gives me great concern about what crude oil prices are going to do over the next couple or three years.”

In a Tuesday interview with “Mad Money” host Jim Cramer, Demshur noted that in the past 23 years, oil demand has grown by roughly 1 percent each year.

But in the last three years, demand has grown by 1.5 percent each year, the CEO said, a sign that low production in oil-rich countries like Mexico and Venezuela is drilling holes in the world’s crude supply chains.

“Right now, we are seeing a big uptick in the amount of crude oil being used,” Demshur told Cramer. “My fear, Jim, is that when we go to later this year into next year and 2020, we see $100-plus crude oil again.”

Demshur voiced these concerns even as his company, a technology-focused oilfield service player that helps oil producers enhance their oil-gathering methods, is performing strongly as giants like Exxon Mobil invest more in drilling for the commodity in more innovative ways.

Yet even as oil companies turn their focus to deep-water drilling and other unconventional methods of oil recovery, Demshur worried that domestic production in the United States and the Americas wouldn’t be able to meet global demand.

The CEO noted that Mexico’s oil production has slid from its peak of three million barrels a day to 1.8 million, and Venezuela’s has declined from three million barrels a day to 1.4 million.

“We’re also seeing sharp declines in West Africa, Angola leading the pack there with Nigeria,” Demshur said. “So as we look around the globe, you’ve got to ask yourself, over the next couple or three years, where is that supply going to come from? Alright, we’re going to have some supply come from the U.S., but if we look around the globe, it’s going to be very limited. I see higher crude prices in the future for sure.”

Shares of Core Laboratories sank 0.35 percent in Tuesday’s trading session, settling at $119.67 a share.
Source: CNBC

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping