FX.co ★ OMV lowers long-term oil price forecast

Some analysts expect major changes in the global energy sector in the medium and long terms. In this regard, OMV AG, an Austrian oil and gas company, downgraded its intracorporate oil price forecast. The company points out that the outlook revision is a reaction to the forthcoming changes in the energy industry. The markets expect an accelerated transition of the global energy sector to low carbon emissions. Thus, OMV AG suggested that the price of Brent crude would fall to $60 from $75 per barrel in the long term. Also, OMV AG confirmed its oil price expectations of $50 per barrel for 2021 and reduced the oil price forecast for 2022 and 2023 to $60 from $75 per barrel. The company suggested that the price of petroleum would decline to $65 per barrel in 2024-2029 and assumed that oil would remain within the $60 price range from 2035 onwards. The revision of oil price assumptions made adjustments to the OMV AG financial strategy. In the third quarter 2020, the company will have to write off €600 million due to the impairments in the Exploration and production division.