Slash in oil prices may cause higher prices as supply shrinks, Schroders says

If oil prices average US$35 per barrel for the rest of 2020, full-year cash flow for the integrated oil companies will reduce by between 50% and 60%.

KUALA LUMPUR: Saudi Arabia’s move to slash oil prices may result in supply being removed from the industry, which could lead to significantly higher prices in the future, according to Schroders' head of commodities Mark Lacey.

In a research note issued on Tuesday, he said the longer oil prices stay at current levels, the more supply will be removed from the industry.