Oil prices are likely to trade in the range of $70-$75 a barrel during the next five years, analysts at Sanford C Bernstein said. | |
| The marginal cost of supply is now about $60 a barrel, Bernstein analysts Neil McMahon and Ben Dell said in a report today. Crude prices are typically 1.1 to 1.2 times that price while limited spare capacity adds an extra increase, they said. |
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| "There also appears little reason to believe that the marginal cost of supply is about to decline, although it may flatten temporarily with a softening oil services market," the report said. |
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| "For pricing to go sub-$60 a barrel then spare capacity would need to top 4 million barrels per day which appears unlikely without a recession." |
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| Even with the higher oil price environment, the Bernstein analysts said there is little reason for major oil companies to merge or break apart. |
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