Eni CEO Says Oil Prices Could Jump to $200 a Barrel

Claudio Descalzi, CEO of Italian oil group Eni, has warned that oil prices could skyrocket to $200 a barrel in a few years, if OPEC members fail to restore stability in oil prices today.

MOSCOW, January 21 (Sputnik) — Claudio Descalzi, the head of Italian energy company Eni Spa, urged members of the Organization of Petroleum Exporting Countries (OPEC) to act to restore stability in oil prices, otherwise oil prices could rocket to $200 per barrel within the next few years due to low investment now, Reuters reports.

Speaking at the World Economic Forum in Davos, Descalzi said that the oil industry will cut capital spending by 10-13 percent this year due to slumping prices. This could create long-term shortages in global oil supply that in turn would sharply increase oil prices up to $200 per barrel in four to five years’ time.

“OPEC is like the central bank for oil which must give stability to the oil prices to be able to invest in a regular way,” Descalzi said, as quoted by the BBC.

Energy giants Total and BP announced earlier today that they will cut back on shale oil projects, a sign that falling oil prices are being felt across the industry, reports CityAM.com, London’s daily business newspaper.

Global oil prices started going down in June, 2014 amid market oversupply. In November 2014, OPEC decided to not change oil output levels contributing to a further price decrease.

In total, Brent crude oil more than halved its price, which went down from $115 per barrel in June to $46 this week.

According to the most recent forecasts by US Goldman Sachs, over the next six months the price of Brent oil could fall to $43 per barrel with WTI crude oil reaching $39 per barrel.