In a year marked by huge spending cuts across the oil and gas industry amid urgently revised budgets and slashed investments, some analysts are now expecting a light at the end of this tunnel, at least offshore. From next year, Rystad Energy expects offshore oil and gas investments to rebound, but there will be a tectonic shift, with nearly half of that investment going to floating production and storage. Earlier this month, Rystad reported that Chinese shipyards are preparing for an increase in new orders for floating production, storage, and offloading vessels beginning next year. This increase would mean that offshore oil and gas exploration and production were on the rebound. In fact, Rystad’s analysts said that over the next five years, 40 percent of newbuilds for the energy industry would be FPSOs. They stopped short of forecasting what the total of new facilities would be and how it compares with previous years.

Banks, meanwhile, diverge on their oil price forecasts, as they often do. Goldman Sachs, for example, said it expected Brent to rebound to $65 a barrel next year while Morgan Stanley said the benchmark would struggle to break the $50 threshold. Goldman motivated its forecast with the expectation that coronavirus vaccines would become available by spring 2021. Morgan Stanley, on the other hand, pointed to the surge in U.S. oil and gas production from the past few years as one reason for its relatively bearish forecast. The other reason was more important: a shift in investor priorities.

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Source: Oil Price