Puli S. Saravanan, regional turnaround director at KBR Asia Pacific, speaking at Asian Downstream Week
By Kevin Goh
Oil prices are expected to stay around US$60 per barrel through next year due to ample supply and tepid demand growth, especially from massive consumer China, Renuka Rajaratnam, an analyst at the Economist Intelligence Unit (EIU), said on Wednesday during Asian Downstream Week 2015.
China’s oil demand is moderating as its economic growth slows due to lower industrial output, rising debt levels, declining trade volumes and a lack of policy clarity, she said at the event at Singapore International Energy Week 2015. The EIU expects China’s gross domestic product to grow by 5.9% in 2017, compared with around 7% over the last year.
India is likely to overtake China as the key driver of global oil demand over the next few years, supported by new pro-business policies, weaker energy prices and planned economic reforms by the government, Rajaratnam said.
“Reforms will be the key for India to take off,” she said.
Oil supply is expected to remain stable over the next few years as the Organisation of Petroleum Exporting Countries maintains output to retain market share, Iran raises its production by the end of 2016 and U.S. output remains resilient, Rajaratnam said.
“There will be a period of adjustment that the emerging markets will be going through over the years,” she said.
Emerging economies – which are mostly net energy exporters – will need to implement reforms and rebalance their markets based on the new global environment, Rajaratnam said. With the accumulation of foreign exchange reserves since 1997 as a buffer, emerging markets will be able to struggle through this period of low oil prices, she added.
About Singapore International Energy Week (SIEW)
In its 8th edition, Singapore International Energy Week is the premier platform in Asia for energy insights, partnerships and dialogue, bringing together the world’s leading conferences, exhibitions and roundtables in one week and one location. SIEW enriches the global energy conversation by convening political, business, academic and energy industry thought-leaders to define and advance the world’s energy challenges, solutions and actions across the spectrum of oil and gas, clean and renewable energy, and energy infrastructure financing.
Please visit www.siew.gov.sg for more information.
About the Energy Market Authority
The Energy Market Authority (EMA) is a statutory board under Singapore’s Ministry of Trade and Industry. Our main goals are to ensure a reliable and secure energy supply, promote effective competition in the energy market and develop a dynamic energy sector in Singapore. Through our work, we seek to forge a progressive energy landscape for sustained growth.
Please visit www.ema.gov.sg for more information.