The oil price may stay lower for longer given the current and anticipated future supply glut in the market, a recent paper released by PwC explains.
The new ‘Opportunities in Adversity: Strategies for a lower oil price’ research paper takes a critical look at what this means for the oil and gas sector, focusing on two key imperatives to success in a prolonged low oil price environment:
(1) Developing a business strategy truly driven by a company’s capabilities;
(2) ‘Right-sizing’ the cost base to sustainably deliver the chosen strategy.
This new report follows a PwC publication ‘Opportunities in adversity – A new dawn for Oil and Gas’ released in February of this year, following on from the 60% collapse in the oil price that had occurred since July 2014. At the time, there was no clear consensus about what shape the price recovery would take. In the past, the price has sometimes rebounded quickly, for example after the 2008-9 collapse, but at other times has stayed depressed for a prolonged period, such as after 1986.
The full ‘Opportunities in Adversity’ report can be accessed on the PwC website, here.