The Organisation of the Petroleum Exporting Countries, or Opec, expects oil prices to be about $76 a barrel in 2025 in its most optimistic scenario, the Wall Street Journal reported, citing a draft of the group’s latest strategy report.
The Opec does not expect oil prices to consistently trade at $100 a barrel again in the next decade, an assessment that has the group considering the return of production limits, the Journal said.
Oil slipped towards $65 a barrel on Monday as signs that US shale oil production was recovering after a recent price rally renewed concerns of a growing global supply glut. The report also considers situations where crude oil costs below $40 a barrel in 2025, the Journal said.
The Opec decided against cutting output in November, despite a huge oversupply in world markets.
The report recommends that the Opec return to a production quota system that it abandoned in 2011 after fights over how much each country would get to produce, the Journal said. The Opec was not immediately available for comment.
Unilateral cut warning
Meanwhile, Qatar’s veteran former energy minister Abdullah Al Attiyah warned Opec members on Monday against cutting oil output unilaterally because the group has lost its role as the world’s swing producer.
“The Opec should not do anything because it is not the swing producer” of the past, Attiyah told reporters in Kuwait City.
“They cannot and will not cut [output] unless the main producers outside the Opec join forces,” he said.
Al Attiyah, who led the energy portfolio in gas- and oil-rich Qatar for about two decades, said the Opec should first reach a binding agreement with non-Opec producers before cutting production.
“Otherwise they will lose market share and others will enjoy high prices and produce more,” Al Attiyah said.
He said Opec and non-Opec producers were currently in talks to strike a deal ahead of the organisation’s meeting early in June.
The days of oil fetching $100 a barrel are over for the foreseeable future, he said, predicting that prices will settle at between $60-70.
Global oil prices dipped on Monday as investors took their cue from a rebounding dollar, awaited fresh US economic data and digested another Chinese interest rate cut.
US benchmark West Texas Intermediate for June delivery slid 19¢ to $59.20 a barrel. Brent North Sea crude for June reversed 29¢ to $65.10 per barrel nearing midday in London.
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