Oil prices may have bounced back but they are unlikely to break the $50 a barrel mark for some time, according to industry analysts.
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Prices are stubbornly sticking around $47 to $49 a barrel as US suppliers have revealed a stockpile of 4.5 million barrels.
The recent recovery peaked at just over $50 a barrel earlier this week, but has failed to sustain value on worldwide markets.
Meanwhile OPEC countries have signalled a production freeze – but at a level that is seeing the main producers still output at near capacity.
Investment bankers Goldman Sachs reckons prices will fluctuate between $45 and $50 a barrel for at least a year and could drop farther if oil producing countries such as Libya, Iraq and Nigeria step up output as they resolve civil unrest issues.
Pension buy outs
“Thawing relationships between parties in conflict in areas of disrupted production would be more relevant to the oil rebalancing than an OPEC freeze, which would leave production at record highs and could prove counterproductive if it supported prices further and incentivised activity elsewhere,” said the Goldman Sachs report.
The news impacts on tens of thousands of oil and gas workers who have lost their jobs in the past two years as companies moved to shed employees to cut costs.
The number of workers was slashed as companies shelved exploration projects and mothballed rigs.
Many employers are offering massive pension buy outs to retirement savers who are willing to sell their rights under final salary pension schemes.
For oil and gas workers sitting out the industry problems in low-cost countries such as The Philippines and Thailand, taking the cash and setting up a tax and investment efficient Qualifying Recognised Overseas Pension Scheme (QROPS) is one financial solution.
Even though these countries have no local QROPS providers, pension firms in other financial centres, such as Malta and Gibraltar are willing to take in transfer funds.
Giving up a final salary scheme in favour of a QROPS is becoming attractive for many oil and gas contractors.
A QROPS does not offer a guaranteed pension, but does come with a 30% tax-free lump sum, flexible drawdown options from some providers and the opportunity to gift 100% of unspent funds to loved ones.
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