Clifford Chance

Oil Prices: Cause and Effect

27 February 2015

The global price of oil had been relatively stable at about US$110 a barrel for the last 4-5 years. However, the increased shale oil production in the US combined with lower global demand for oil has recently led to a plunge in oil prices. Oil prices have fallen significantly since June 2014.

The decline, together with uncertainty about where oil prices will settle, has created sudden downward pressure in the oil & gas sector and has given rise to a need to re-visit business planning and strategy, at least in the short term. Some of the key themes that we have seen and expect to continue with the increased volatility in oil prices are set out in this briefing.

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