Aug 08: Close to US$1trillion of capex meant for 2015-2020 timeline has been taken out of the system so far, since the oil price crash of 2014
8While project sanctions activities are seen to be picking up now, all the deferrals will mean that more than 3mmbpd of supply that was supposed to come onstream by 2020 will now only come in the years after that.
8This will help the supply-demand equation in the medium to long term.
8Also, the need to develop oil production in more expensive areas – as the most expensive last barrel may need to be called upon to meet incremental demand – will continue to support oil
 prices.
8According to estimates from independent oil & gas consultancy Rystad Energy, the marginal sources of supply in 2020 will be currently non-producing shale fields (new shale) and oil sands, with a weighted average breakeven price of around US$63-66/bbl.
8Imputing some cost inflation to these numbers, we peg our longer-term oil price forecast to around US$65-70/bbl.
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