Former chief executive of BP, Tony Hayward, has claimed that oil prices are set to soar after their recent steep decline in prices, according to the Financial Times. The prediction was made by Hayward – who presided over BP during the 2010 Deepwater Horizon oil spill and now runs the Iraq oil focused company Genel Energy – at a Financial Times summit in Switzerland on April 23.
Hayward is not alone in his optimism for oil prices
Hayward is not alone in his optimism for oil prices. Ian Taylor, chief of the Dutch energy commodity trading company Vitol also claims that the price of oil has bottomed. Likewise, the CEO of the liquid gas exporter Cheniere Energy Charif Souki shares the same sentiment. In an interview with CNBC he claimed: “It may take another few months, but I think the worse is now behind us and the correction mechanism has started.”
The recent boom in shale initially led to a fall in oil prices in 2014, from over $100 a barrel in June 2014 to less than $50 in January 2015. In what seemed like a counterintuitive move, in November 2014 rather than cut production in order to hold up prices, OPEC held production rates steady, further depressing the price of oil.
According to Hayward this was to stop the shale boom “in its tracks”, the FT reports. “The supply base is shrinking,” said Hayward, “[t]hey [OPEC] are maintaining their market share. It seems like it’s been a big success.” Speculating that the price of oil would return to $80, Hayward called OPEC “the most successful cartel in history.”