Some highlights from the FT Commodities Summit, which is taking place in Lausanne, Switzerland this Tuesday and Wednesday.
Oil production is becoming more of a manufacturing activity
On the oil price slump, Noble CEO Yusuf Alireza said “the traditional [Exploration & Production] player has a very high capex and low opex so the marginal cost of the barrel is very low, and when you have that kind of dynamic you have a very steep supply curve, whereas shale is much more of a manufacturing activity.”
He added: “You have to force the oil out of the ground. Which means, you have more opex, the higher cost of opex, which means you have a player in the market that really is a swing producer, which can react to effectively higher prices, to lower prices.Earlier:
The marginal cost of that barrel is higher. There is a reason why Saudi Arabia made that decision, they realised that changes in their supply would not impact prices just market share.”
Nobody predicted the depth of the oil price slump
Jeremy Weir, CEO of Trafigura said: “At this conference last year if you asked everyone where would the oil price be in 12 months time I think, potentially, more than 50 per cent may have got it right in terms of price direction, but in terms of extreme price move, everyone would have been wrong....MUCH MORE
Commodities: So Gunvor, Noble, Trafigura and Mercuria Walk Into A Bar...
