OPEС members are not going to cut their oil production in the near future despite the declining oil prices triggered mainly by increasing oversupply. On top of that, Iran is going to reenter the global market of crude oil as a major player, which is definitely going to increase the growing oversupply even faster.
This decision was announced by Abdalla Salem el-Badri, Secretary General of OPEC, during his visit to Moscow. He says that OPEC is not going to to cut the overall oil production below 30 million barrels a day as it used to be before. He assumes that the global demand for crude oil is eventually going to start growing later this year as well as next year. With that said, OPEC members see no point in cutting its oil production in the coming months.
The Russian Minister of Energy Alexander Novak shares this prediction. On top of that, he says that the global demand for crude oil is going to get higher by 1,5-1,6 million barrels a day in the near future. OPEC and Russia assume that the overall situation in the global oil market is going to get more stable by 2016. At the same time, Abdalla Salem el-Badri supported the decision to cancel the sanctions against Iran.
Oil Prices May Drop Down To $35/b
In the mean time, some experts assume that the near-term bias will remain clearly bearish, which means oil prices are likely to go further down mainly due to considerable and growing oversupply, especially as Iran is about to add the fuel to the fire by filling the market with its own abundant inventories of crude oil, Masterforex-V Academy reports.
Those experts who are bearish on crude oil predict the prices to drop further down to $40 or even $35 per barrel. They see Iran as a major bearish driver. Another factor to support their prediction is the growing amount of oil rigs in the USA, which is still trying to become one a major oil exporter, especially as the cost of shale oil production has dropped down to 30 dollars per barrel.
