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11 May 2015
Oil to stay below USD 100/barrel until next decade – OPEC’s draft strategy report
FXStreet (Mumbai) - Reuters, on Monday, reported that the Organization of Petroleum Exporting Countries (OPEC) does not see oil prices consistently trading at USD 100/barrel until next decade.
The OPEC’s draft strategy report is reportedly carrying the pessimistic forecast, which may result in OPEC switching back to production quotas. The quotas/limits were abandoned in 2011 as small producers struggled to compete with large exporters. As per WSJ report, the new limits would allow the small producers to produce more. The report also says the limits would be considered if the OPEC’s share of the global market fell below 32%.
The draft document may be subject to change ahead of the next OPEC meeting in June. Crude prices have weakened slightly after Reuters and WSJ reported the story.
The OPEC’s draft strategy report is reportedly carrying the pessimistic forecast, which may result in OPEC switching back to production quotas. The quotas/limits were abandoned in 2011 as small producers struggled to compete with large exporters. As per WSJ report, the new limits would allow the small producers to produce more. The report also says the limits would be considered if the OPEC’s share of the global market fell below 32%.
The draft document may be subject to change ahead of the next OPEC meeting in June. Crude prices have weakened slightly after Reuters and WSJ reported the story.