Mark Taylor: We've already seen the oil price rise to about $72 a barrel in Brent terms. There has been a lot of commentary around the geopolitical issues including Syria and missile strikes and that sort of thing. We think that that has short-term implications, if anything, no doubt helping to fuel the oil price rise at the moment. But there are longer-term larger issues at play here, not least that the OPEC cartel has shown some unusual discipline in keeping supply in check and there have been some other issues like Venezuelan production coming under pressure because of a lack of investment, that sort of thing. Those things are probably going to bubble along for the longer term and they are supporting the oil price.
But we think that that's not necessarily a good thing. We think these prices are too high and they are going to encourage US shale gas production which in the long-term will see oil prices come under pressure, if anything, and hopefully, you will see some stabilisation eventually around our long-term $60 a barrel forecast. That's the level we think is the sweet spot where the world gets enough oil supply but not too much. You don't encourage too much US shale production. They are the swing producer now.
