KUALA LUMPUR, June 5 | Tue Jun 5, 2012 12:17am EDT
(Reuters) – Oil prices will weaken more in the second half of 2012 as demand reacts to the slowing global economy and international political tensions ease, Royal Dutch Shell Chief Executive Peter Voser said on Tuesday.
Brent crude dropped below $100 a barrel recently to a 16-month low as weak economic data from the United States and China added to ongoing worries about the euro zone crisis.
“Global demand is softening, we have got recessionary elements in Europe, a small slowdown in Asia Pacific,” Voser told Reuters in an interview.
“At the same time some of the geopolitical elements of price volatility over the past few months have kind of receded, and therefore we see a softening of prices which I expect to go well into the second half of this year.”
Concern about the impact of U.S. and European sanctions on oil supply from Iran helped drive Brent above $128 a barrel earlier this year.
Those concerns have eased, and Voser said the global oil market had enough supply to deal with the impact of the sanctions.
“I think the world has dealt with that,” he said, when asked about the impact of sanctions on exports.
The pace of oil demand would recover slowly in 2013, and prices would rise with it, he said.
Output from Iraq’s giant Majnoon oilfield, which Shell is developing and operates, will reach 175,000 barrels per day (bpd) before 2015, up from around 65,000 bpd to 75,000 bpd now, he said.