Oil Price Risks Force Maersk to Plan Deeper Cost Cuts, CEO Says - Bloomberg
▻http://www.bloomberg.com/news/articles/2016-05-04/oil-price-risks-force-maersk-to-plan-deeper-cost-cuts-ceo-says
A.P. Moeller-Maersk A/S is adapting its cost base to prepare for the risk of lower crude prices as the world keeps producing more petroleum than it can consume, according to the chief executive officer of the Danish shipping and oil conglomerate.
Oil has risen about 60 percent from a 2016 low. But the risk that prices will again fall is forcing Maersk’s oil unit to explore bigger cost cuts than previously planned, said group CEO Nils Smedegaard Andersen.
“The price will obviously be driven by the balance between supply and demand and there will be oversupply for many months still,” he said by phone from Copenhagen. “It definitely can’t be ruled out that the oil price will fall again.”
Brent crude has rebounded as lower U.S. output removes some excess supply from the market. One barrel traded at about $45 on Wednesday, compared with a low of $28 in the middle of January.
“I have previously said the oil price was too low, but it’s very plausible that the balance between supply and demand will continue to be unfavorable,” Andersen said.
