When oil prices plummeted 50 percent in 2014, you might have heard people say what John England heard.
“When people say we’ve seen this before, we actually haven’t seen this before. This downturn is very different than any downturn we’ve had in the past,” England told reporters attending the Deloitee Oil & Gas Conference in Houston.
England leads energy analysis at the consulting firm. He says this downturn is uniquely bad, having lasted longer than ones in ‘86 and ‘98. Deloitte surveyed oil & gas executives recently to see when they thought this downturn would end.
“I think there’s, at best, cautious optimism that we’ve turned the corner and things are starting to go up. Over 50 percent of them believe we’ll get back to $60 a barrel by the end of 2017,” England told reporters.
England says $60 a barrel for oil is the threshold that would allow many oil & gas companies to grow versus just survive. Oil now is at about $45 a barrel. The Deloitte survey found many executives think the recovery is underway right now or will be by next year. But the survey found about a third of the executives thought a recovery won’t begin until 2018.
Then there’s the political factor. When a new president is elected in November, England says a lot of people in the energy industry may still wonder what impact it’ll have on their business.
“The level of uncertainty around this election seems higher than I ever remember in any past ones…because I think they’re not putting out a lot of specifics around energy policy. I don’t think it’s really been front and center in this election. “