Oil rout will drive deals for oil companies

Hugh Ebbutt, Richard Forrest, Vance Scott and Alvin See, of consultancy AT Kearney, weigh up where the action will be as the price plunge shakes up the sector

As we enter 2015, the oil price has fallen well below $50 a barrel (/b), down from Brent’s $115/b highs of late June. The steepest drop has been since Opec’s meeting in late November. It is nearer $40 in the Middle East, and much lower in parts of North America where bottlenecks restrict flows. And oil may yet fall further. The price has broken through a range of previously expected resistance levels – of $80, $70, and $60 in the week before Christmas – hurdles based on estimated break-evens for Saudi or other Opec budgets and producers in key areas. Analysts and traders, for now, have given up trying to call the bottom or “catch the knife”.  Some are betting Brent could fall below $40. The