Hope of a possible recovery in world oil prices remains a mirage amidst concerns that prices could drop again. Although there has been tentative confidence that the price of oil would soon stabilize however, after the international Energy Agency declared that prices of crude may bottom out in the near future, Algeria’s Energy Minister Salah Khebri says the future is still bleak for the oil industry. Khebri told a gathering of stakeholders at a North African Petroleum Exhibition and Conference forum “The recovery in prices is still very unstable.” As a matter of fact, he maintained, “The price could even take a reverse course again. “The Minister also said that his country would continue to work to find a consensus solution within OPEC to help prices recover.
The situation is already telling on the welfare of many oil firms. Encana Corp, a Calgary-based company announced plans to lay off an additional 20 per cent of its work force of about 2,500. The oil firm also chopped its 2016 budget to between $900-million and $1-billion, down sharply from the $1.5-billion to $1.7-billion it expected to spend as recently as December and a 55-per-cent reduction from last year’s outlay. Southwestern Energy Company announced plans to shed more than 40 percent of its workforce starting in the first quarter of this year.
Former executive at Algerian state oil firm Sonatrach and former energy minister, Sadek Boucena who was at the forum, said that he believed prices could range from between $50 to $70 if there is an agreement between OPEC and non-OPEC producers. Oil prices have fallen by two thirds since mid-2014 because of a supply glut caused by the booming output from the US and OPEC. Prices fell below $30 per barrel in January, the lowest in more than a decade. Brent crude futures LCOc1 rose 62 cents to 40.27 dollars a barrel on Wednesday, having touched three-month highs on Tuesday above 41 dollars, while U.S. crude futures CLc1 were up 49 cents at 36.99 dollars.