The chief executive officer of Norway's biggest oil company says he has few doubts that crude will again trade at around US$50 to $60 a barrel, marking a jump in prices that could be more than 30 per cent compared with today's level.
"Eventually, I'm very confident that it will," the chief executive Eldar Saetre said on Wednesday. "But there is a lot of uncertainty. We still have a situation with a lot of volatility."
His comments came as the company reported a surprise loss amid lower crude prices and taxes on unprofitable international operations.
Following a June 2014 peak, oil prices collapsed 77 per cent through January, when prices hit a low point of $27 a barrel. Brent crude has since recovered some of that drop as supply disruptions from Nigeria to Canada trimmed a worldwide surplus. But those developments failed to maintain a rally above $50, and oil has since dropped to about $45.
"The market will find a balance in the course of this year," Mr Saetre said in Oslo. "But we believe it will take a while before we get a normal situation on the stockpile side. And it's difficult to say how the market will play out in the meantime. There's a lot of uncertainty."
Statoil reported an adjusted loss after tax, which excludes financial and other items, of US$28 million in the second quarter after a profit of $929m a year earlier. That missed the average estimate of 16 analysts for a profit of $294m.
"The results were strongly affected by weak oil and gas markets," said Mr Saetre. Refining margins also fell by almost half from a year earlier, producing a disproportionate effect on already low earnings, he added.
He said the group continued its "plan to improve efficiency and make faster and deeper cost reductions," and "maintain our production guidance, expecting annual organic production growth of around 1 per cent from 2014 to 2017".
Statoil, which is 67 per cent owned by the Norwegian government, has followed rivals such as BP in slashing spending and reducing costs to protect cash flow and preserve shareholder payouts. The company cut its capital expenditure to about $12 billion this year from an earlier target of $13bn. That is 40 per cent lower than record spending of $20bn in 2014.
Statoil's shares fell as much as 4.1 per cent and were down 2.7 per cent to 139 kroner as of 11:51am in Oslo. That made the stock the worst performer on the 20-company STOXX Europe 600 Oil & Gas Index and pared this year's gain to 12 per cent.
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