Oil prices could crash next year due to excess of supply, OPEC President and Venezuelan Energy Minister Ali Rodriguez said Monday. The price has increase due to speculation and high taxes Rodriguez reminded.
"The main reason prices are high is speculation. We have been saying for some time now there is no shortage of crude oil on world markets," Rodriguez told reporters following the signing of an energy deal with Cuba, Bridge News reported.
OPEC will boost its oil production quotas by 500,000 bpd as of midnight tonight under the terms of its price-band scheme. If the price of the OPEC basket of crude oils trades above $28 for 20 days, the cartel has committed to adding half a million bpd to bring the price back within the band.
Rodriguez has maintained that oil supply is more than a million bpd over demand. "Overproduction will inevitably result in a sharp fall in prices, perhaps as early as after the winter in the United States," he remarked.