Petroleum outlook remains unpredictable but the overall price will rise as the world economy improves, say analysts
"Petroleum prices were high at the start of the year because of the Russia-Ukraine crisis, supply disruption in Libya and fear of disruption by Isis in northern Iraq," Chairat Aranyasathat, global commercial planning manager at Top Petroleum, told a seminar in Bangkok yesterday.
Kurujit: Good time to adjust energy prices
"The conflict between Russia and Ukraine has corroded the European economy, but the impact of Isis on production is minimal. China's slowing growth and the rise in US oil production have kept global prices low recently."
An improving US economy will have a positive impact on emerging economies. But other factors that could affect the price of oil next year will be whether Opec reduces output, the impact of Ebola and economic stimulation by the European Central Bank.
PTT Group predicts oil will reach US$90-95 per barrel in 2015. Prices are hovering around $80 per barrel now.
PTT analyst Krida Nimmanhaeminda said US oil production had been growing at the fastest rate in 30 years due to an increase in shale oil this year.
The global oil price will remain low for a while because the end of US quantitative easing will lead to a stronger dollar.
If the US increases interest rates and the European Central Bank begins to stimulate the economy, it will make the dollar stronger, putting pressure on oil prices.
"China has also expanded its strategic oil reserve, which will help demand. China will also increase purchases next year if the price remain low," said Mr Krida.
Also addressing the seminar, deputy energy permanent secretary Kurujit Nakornthap said companies had until Feb 18 next year to apply for the 21st round of bidding for petroleum concessions.
The government plans to auction concessions for 29 onshore and offshore blocks, expecting to draw investment of 5 billion baht over the next three to five years.
"The auction could be cancelled if companies fail to meet qualifications," Mr Kurujit said. "As global oil prices have continued to decline, this is a good time to adjust the energy price structure, especially excise tax for petrol and diesel."
He said increasing excise tax or adjusting contributions to the Oil Fund should be done soon so that it will have minimal impact on the cost of living.