Oil bosses see more pain as recovery slips to 2020

Bloomberg

Three years into the biggest oil downturn in a generation, industry bosses see the recovery slipping further from view.
It could easily take until the end of the decade for better times to return to an industry that’s already endured a longer slump than most people expected, according to Total SA Chief Executive Officer Patrick Pouyanne and Weatherford International Plc head Mark McCollum. Executives gathering at the World Petroleum Congress in Istanbul said they’re still focused on repairing battered finances and resetting their operations to withstand low prices.
“In terms of the magnitude of damage this is by far the worst” industry downturn, McCollum said. It may take until 2020 for demand growth to accelerate enough, or for a supply gap to emerge that US producers can’t fill. “That’s when pricing will begin to rise. Until then it feels very tenuous.”
That’s an enormous turnaround from the last World Petroleum Congress in Moscow in 2014, when people were speculating oil could rise as high as $125 after the precursor to IS seized parts of northern Iraq. Three years on, Iraq has driven the extremists out of the city of Mosul, but the US shale industry that triggered the slump to below $30 has survived and thrived. Even as OPEC curbs production, banks including Goldman Sachs Group Inc and BNP Paribas SA are cutting their price forecasts for the years ahead.
“Lower for longer is the new normal,” Lorenzo Simonelli, CEO of Baker Hughes Inc., said in Istanbul. Exploration has slowed and producers outside the shale areas in the US aren’t increasing spending, he said.