Statoil CEO ‘confident’ of oil touching $60

OSLO: The chief executive officer of Norway’s biggest oil company says he has few doubts that crude will again trade at around $50 to $60 a barrel, marking a jump in prices that could be more than 30 per cent compared to today’s level.

“Eventually, I’m very confident that it will,” CEO Eldar Saetre said in a television interview with Bloomberg’s Manus Cranny and Anna Edwards on Wednesday. “But there is a lot of uncertainty. We still have a situation with a lot of volatility.”

Following a June 2014 peak, oil prices collapsed 77 per cent through January, when prices hit a low point of $27 a barrel. Brent crude has since recovered some of that drop as supply disruptions from Nigeria to Canada trimmed a worldwide surplus. But those developments failed to maintain a rally above $50, and oil has since dropped to about $45.

“The market will find a balance in the course of this year,” Saetre said in a separate interview in Oslo after a press conference. “But we believe it will take a while before we get a normal situation on the stockpile side. And it’s difficult to say how the market will play out in the meantime. There’s a lot of uncertainty.”

The fallout of lower oil prices on Statoil’s earnings was broadly what the company had expected, Saetre said on Bloomberg TV. The oil company posted its first adjusted loss as the price decline took its toll. That comes after BP on Tuesday reported a 45 per cent slump in earnings and missed analyst estimates.

Spending cuts

Statoil deepened spending cuts after it reported an unexpected loss amid lower crude prices and taxes on unprofitable international operations.

The adjusted loss after tax, which excludes financial and other items, was $28 million in the second quarter after a profit of $929 million a year earlier, the Stavanger-based company said Wednesday. That missed the average estimate of 16 analysts for a profit of $294 million.

Statoil’s shares fell as much as 4.1 per cent and were down 3.4 per cent to 137.90 kroner in Oslo. That made the stock the worst performer.