A grim report on the world economy by the International Monetary Fund (IMF) yesterday caused oil prices to continue to slide, with international prices hitting the lowest level since 2002 as planned output cuts were deemed insufficient to offset a COVID-19-fuelled slump in demand.
With the price on the West Texas Intermediate (a benchmark for the grade of crude oil used for oil pricing) dropping to $19.20 per barrel.
“We forecast that oil prices will likely remain below $43 per barrel from now until 2023 owing to persistently weak demand in a deep global recession sparked by the COVID-19 virus,” the report said.
“However the rapidly falling cost of oil, which greases the wheels of the global economy, will help consumers,” the IMF added.
The low prices are good news for Cambodian transport, farms, factories and private motorists who benefit from cheaper gasoline, but they do have a serious effect on the Ministry of Mines and Energy’s current plans for offshore oilfield exploration.
This is especially true for the Singaporean-listed KrisEnergy that have continued plans for oil to be extracted from the Apsara oilfield, located in Block A of the Khmer Basin in the Gulf of Thailand. The Apsara oilfield is set to become the first productive oilfield in the country.
Lim Solinn, Oxfam country director, has previously told Khmer Times that the economic benefits of the operation would be substantial for the Cambodian Government.
However, with these newly revised current market conditions, the project’s viable benefits are still uncertain.