The Organisation of the Petroleum Exporting Countries, OPEC, has predicted that the price will not rise until 2017. This has dashed hopes of seeing any rise in oil price soon.
This was revealed by the Secretary-General of OPEC, Mr. Abdalla El-Badri, at the Annual Oil & Money Conference in London. He noted that the decline in global crude oil prices may not abate until 2017, as the market is expected to rebalance within two years.
He said rebalancing the world oil markets was the responsibility of all producers and not a burden to be borne by OPEC alone.
Badri however predicted that oil prices would rise from current six-year lows of below $50 per barrel in the next few months, although he did not say how much improvement he expected.
“We have an overhang of 200 million barrels in the market. All of us should work together, OPEC and non-OPEC, all of us have to work together to see how we can get rid of this 200 million barrel overhang,” Badri said.
“I am really disturbed,” he said, referring to the wave of investment cuts announced by oil companies this year in response to the price plunge. “You will see the result. This means less supply and higher prices in the future.”
He further explained that overall global investment in oil could drop by $130 billion this year from $650 billion in 2014. He noted that non-OPEC supply growth was slowing and was expected to be zero next year, while the call on OPEC crude was rising.
Badri said he expected Iran’s full return to the market to be discussed at OPECs next meeting on December 4, in Vienna, Austria. Iran has said it expects to boost its crude exports by one million barrels per day within six months of the lifting of sanctions.
