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]
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.
Another redundant phrase that's de rigeur these days is "on the ground."
What was OPEC predicting for the next decade or so 1n 1972?
The U.S. consumes more oil than India and China combined I believe.