U.S. construction and fracking major Halliburton expects that the worst crude crash in a generation will lead to a spike in oil prices by 2020., according to World Oil.
Tumbling oil prices brought on by a glut of global oil has forced the industry to slash about $2 trillion in investments, according to the world’s biggest fracking provider. The oil industry has lost $2 trillion in investments due to chronically low prices, said Mark Richard senior Vice President for global business development at the World Petroleum Conference in Istanbul on Wednesday.
"Sooner or later, the market is going to catch up," Richard said. "You’ll see some kind of spike in the price of oil. Maybe somewhere around 2020-2021, but it’s got to catch up sooner or later."
The oil industry has been struggling to climb out of a downturn that eliminated more than 400,000 jobs, forced hundreds of companies into bankruptcy and led to sharp output cuts after oil prices tumbled from more than $100/bbl in the middle of 2014 to a low of $26.05 in February last year.
Explorers in North America, where Houston-based Halliburton generates most of its sales, were the first to return to work, boosting spending 10 times faster than the rest of the world.
The international markets, which generally take longer to turn around due to the more massive projects underway, "hopefully" hit rock bottom in the first half of this year, Richard said.
Production cuts by the Organization of Petroleum Exporting Countries (OPEC) had caused a rise in oil prices back in January, but new production from Nigeria, Libya, and the United States have erased all gains from the brief bear market.
“All of our major clients are working to bring the total cost down internationally," he said. "It depends how quickly we can get to those price points and how quickly our customers are able to see that their investment is going to be solid for the long term."
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