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Shell CEO dubious prediction on oil prices

Today we have another forecast from a Chief Executive of Royal Dutch Shell Plc, no doubt based on an assessment by the crystal ball gazers at Shell, the famed Scenarios team. Is it a case of wishful thinking on the part of Shell? Can we have faith in the prediction made by the current CEO?

By John Donovan

Today we have another forecast from a Chief Executive of Royal Dutch Shell Plc, no doubt based on an assessment by the crystal ball gazers at Shell, the famed Scenarios team. 

According to Catherine Boyle of CNBC, Ben van Beurden, Shell’s current CEO is confident that oil will return to “very robust” pricing in the long-term.

This is despite the fact that as a result of increased production by Saudi Arabia and the USA, Brent crude dropped to less than $93 a barrel last week, the lowest price for two years. 

Is it a case of wishful thinking on the part of Shell?

Can we have faith in the prediction made by the current CEO?

In January 2008, the then CEO Jeroen van der Veer forecast that demand for oil and gas would outstrip supply within 7 years. The prediction was based on an assessment from the Shell Scenarios team. 

So will peak oil occur in four months time?

No, because the prediction turned out to be wildly inaccurate. 

Since Jan 2008, the outlook has transformed as a result of the shale revolution leading to what the Sunday Times has recently described as a huge surge in production, leading to America snatching Russia’s crown as the world’s biggest producer of fossil fuels. 

I must therefore conclude that it is a self-serving worthless prediction by a team with a flawed record in recent years of crystal ball gazing. The same team that failed to predict the shambles in Shell’s Arctic campaign. 

RELATED

Shell seers who failed to predict Arctic debacle offer latest scenarios

We’ll begin to run out of oil within 7 years: Daily Express 26 Jan 2008. 

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