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OPEC not in panic over sharp oil price fall

November 06, 2014, 17:43 UTC+3
The OPEC head said he expected world oil prices to bounce back in the second half of 2015
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© EPA/Alejandro Ernesto

VIENNA, November 6. /TASS/. The Organization of the Petroleum Exporting Countries (OPEC) is not panicking over a sharp fall in world oil prices, although their decline is slightly above the normal rate, OPEC Secretary General Abdallah Salem el-Badri said on Thursday.

The OPEC head said he expected world oil prices to bounce back in the second half of 2015. “Perhaps, the price will bounce back. I believe this will happen in the second half of the next year. But the situation with low oil prices will persist so far,” he said.

The current downward oil price trend leads to lower investment and will subsequently cause a drop in supply on the market, he said. “No one will invest at low prices,” the OPEC head said.

OPEC's forecasts for oil prices and demand

The oil price of the OPEC reference basket will reach $124 per barrel in nominal terms by 2025 and $177 per barrel by 2040, OPEC said in its annual World Oil Outlook on Thursday.

In real terms based on 2013 prices, the cost of the OPEC reference basket will remain at $100 per barrel by 2035 and reach $102 per barrel by 2040, according to the OPEC’s forecast. The OPEC reference basket comprises 12 Middle Eastern, African and Latin American crude oil blends.

The OPEC expects global oil consumption to rise by 21 million barrels per day or about 23% by 2040 compared with 2013 to reach 111 million barrels per day. Oil demand will rise noticeably in India and China, while developing Asia will account for 71% of the demand increase in developing countries, the OPEC said.

Asia-Pacific crude oil imports are expected to increase by 11 million barrels per day between 2013 and 2040 to almost 30 million barrels per day by 2040.

At the same time, the Middle East will supply almost 20 million barrels per day of the Asia-Pacific’s crude oil by 2040, with exports increasing by 7 million barrels per day from 2013-2040. The second largest contribution to Asia-Pacific crude imports will come from Russia and the Caspian Sea countries, the OPEC said.

“Subject to the assumed pipeline capacity expansion in this region, crude oil exports from Russia & Caspian countries to the Asia-Pacific will almost triple by the end of the forecast period, compared to 2013 levels. It is expected to reach 4 mb/d by 2040,” the OPEC said.

The OPEC also expects annual oil demand growth by an average of 1 million barrels per day by 2019.

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