Oil Rally Risks Reverse If Idle Fields Return, Dana Gas Says - Bloomberg video

Oil Rally Risks Reverse If Idle Fields Return, Dana Gas Says - Bloomberg

Oil’s rally may end or even reverse if producers resume pumping some of the 10 million barrels of daily output capacity that now sits idled, according to the head of Middle Eastern energy producer Dana Gas PJSC.

Oil and gas companies are looking to bounce back from a year in which the coronavirus hammered economies and caused crude prices to plummet. Firms canceled projects, suspended operations and cut spending. Curbs on output from the world’s largest producers have helped oil recover to more than $60 a barrel, roughly triple last year’s low in April.

“I would hesitate to say that we’re in the start of a super cycle for oil,” Dana Gas Chief Executive Officer Patrick Allman-Ward said in a Bloomberg Television interview. “It won’t take very much to put the demand-supply balance back to a negative space.”

The roll-out of vaccines, strong demand in China and cuts by the OPEC+ cartel have helped bolster prices and reduced oil stockpiles, he said. Speaking later on a separate conference call with reporters, Allman-Ward said he was fairly optimistic oil will stay near current levels for the rest of the year.