OPEC: Oil To Remain Below $100 Per Barrel Through 2020s

by Cameron Aubernon

May 18th, 2015 12:06 PM

opec oil to remain below 100 per barrel through 2020s

Those hoping for a return to $100 per barrel of oil are in for a long wait, as OPEC says oil will remain below the price point through the 2020s.

A report by the group forecasts oil will trade for around $76/barrel in 2025 under optimistic conditions, The Wall Street Journal reports, with $40/barrel under more dire straits. The forecasts take into account the group’s competitors in the United States coping through low prices amid increased production.

To combat this, the report recommends OPEC return to the production-quota system it ditched in 2011 amid conflict over how much each member state would be allowed to produce. Members are reluctant to go back, preferring to attract new business instead of being tied down by quotas most ignored already. However, the proposal would grant poorer members, like Algeria and Venezuela, the right to produce more oil, and would come into force if OPEC’s share of the global oil market fell below 32 percent, the size of the share it holds now.

The report comes amid worries among the members about their ability to balance their respective budgets with oil money. According to the International Monetary Fund, only Qatar and Kuwait can weather trading at $76/barrel, while most need trading to be as much as $130/barrel for a properly balanced budget.

[Photo credit: Vincent Eisfeld/ Wikimedia Commons/ CC BY-SA 4.0]

#2020s #Competition #MarketShare #OilPrices #OPEC #OrganizationOfThePetroleumExportingCountries #ProductionQuotas #Reports

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9 of 58 comments

Fordcomm on May 18, 2015

At the risk of sounding like the grammar police, isn't the use of the word "point" in the phrase "price point" kinda, well, pointless? I'm not convinced that it really adds much meaning. Pet peeve, I guess.

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- WheelMcCoy on May 18, 2015
  
  @fordcomm - "At the risk of sounding like the grammar police, isn’t the use of the word “point” in the phrase “price point” kinda, well, pointless? " You are correct... price point, a common turn of phrase, is redundant. Price is sufficient. And I don't see us as the grammar police. Since TTAC (historically) can't afford a full-time editor, crowd-sourcing grammar is a very real alternative. As long as we stay nice about it.
  
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- JimC2 on May 18, 2015
  
  @WheelMcCoy While we're on the topic, another common--but pointless--turn of phrase is "traveling at a high rate of speed." It's just "traveling at high speed" or "going fast." High rate of speed means rapid acceleration; high speed is simply high speed. People who use the phrase "traveling at a high rate of speed" sound like some illiterate hick sheriff who ironically throws around extra words trying to sound edumacated while lecturing you about the dangers of zipping through his whistle stop kingdom. Come on, B&B. Those hick sheriffs hate auto enthusiasts like you and me. For the sake of your own self respect, don't use this dumb phrase!! Rant over.
  
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- Redav on May 19, 2015
  
  I interpret "price point" a little differently. To me, it's the same as saying "target price." It's a reference value, not a real value while "price" is the actual transaction value. Thus, saying that the price will stay below a price point does make sense to me, although I freely admit it to not be the best phrasing.
  
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- Exfordtech on May 20, 2015
  
  @JimC2 High changing (increasing) rate of speed is acceleration, a constant rate of speed is zero acceleration: a = dv/dt for you calculus fans.
  
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210delray on May 18, 2015

Another redundant phrase that's de rigeur these days is "on the ground."

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RHD on May 19, 2015

What was OPEC predicting for the next decade or so 1n 1972?

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DearS on May 19, 2015

The U.S. consumes more oil than India and China combined I believe.

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- Lorenzo on May 19, 2015
  
  The US uses 18 million barrels per day, out of 93 million barrels total for the world. Yes, it's more than India and China combined, but the percentage of 19% is less than it has ever been. We WERE using almost 22 MBPD, but electric generation and much of industry has switched to natural gas. We've been the world's largest user of oil since the 1920s, but also the world's largest producer. In 1940, we used half the world's production, but produced 2/3 of the world's oil. With fracking and new technology, we can be self sufficient again, leaving more oil produced elsewhere for the rest of the world, and possibly have enough excess to export.
  
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