Oil Price Spike Inevitable As New Discoveries Hit Seventy-Year Low

The oil industry only discovered about 2.7 billion barrels of new supply in 2015, a tiny fraction of the annual average for the past fifty years. The dismal result was one of the worst performances from the oil industry in decades. 2016 could be even worse.

The 2015 figure is about one tenth of the annual average dating all the way back to 1960, according to Wood Mackenzie. Shockingly, 2015 saw the least amount of oil discovered in a calendar year since 1947. But with the massive spending cuts extending into 2016, this year the industry is on track to discover even lower volumes. As of the end of July, the global oil industry has only reported 736 million barrels of new oil discovered.

Of course, with oil prices trading at less than $50 per barrel, many of the oil fields around the world that have yet to be explored are not economically viable. New discoveries are “at rock bottom,” Nils-Henrik Bjurstroem, a senior project manager Rystad Energy AS, told Bloomberg. Rystad Energy published similar findings earlier this year, concluding that 2015 was the worst year for new oil discoveries in over sixty years. “There will definitely be a strong impact on oil and gas supply, and especially oil.”

http://oilprice.com/Energy/Crude-Oil/Oil-Price-Spike-Inevitable-As-New-Discoveries-Hit-Seventy-Year-Low.html