Eni says lower global inventories makes oil more vulnerable to political shocks

30 January 2018
Claudio Descalzi says instability in the Middle East could drive prices higher in 2018

Eni’s Chief Executive Officer Claudio Descalzi has said that lower global oil inventories are likely to make energy prices more sensitive to political shocks in 2018.

“Geopolitics can hit because we do not have this kind of cushion that can protect the price,” he said, speaking at a conference in London on 29 Janaury.

Descalzi said that he believed that demand from Africa, South America and Asia had played a big part in reducing global inventories and oil prices would be supported by strong demand from Asia over coming years.

The rise of electric cars means that Asian industry is likely to drive demand rather than car use, according to Descalzi.

“Cars are not the main issues - industry is the main issue,” he said.

Descalzi said he saw demand for gas increasing and he believed that Europe would become a key market for gas from Egypt.

In December the Zohr gas field, which was discovered by Eni and is the biggest field in the Mediterranean, started producing.

It is estimated to hold an estimated 30 trillion cubic feet of gas.

Descalzi said that he believed gas from Zohr would remain price competitive even if the market was flooded by gas from the US, Qatar and Australia.

Once the later stages of the Zohr project are complete the field is expected to have a capacity of 2.7 billion cubic feet a day.

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