OPEC forecasts oil to recover to $80 per barrel by 2020

Organization of the Petroleum Exporting Countries’ (OPEC) report reveals oil prices will grow by no more than $5 per barrel to reach $80 by 2020

Photo by: AP
Photo by: AP

An oil refinery is silhouetted against the setting sun, McPherson, Kansas, US, August 19, 2015

OPEC forecasts oil prices will grow by no more than $5 per barrel a year to reach $80 by 2020, with rival non-OPEC production growth slowing but not fast enough to fully clear the current oil glut, according to OPEC sources.

The sources said the figures came from an updated mid-term strategy report discussed this week by the representatives from the Organisation of the Petroleum Exporting Countries (OPEC) in Vienna, which has yet to be fully endorsed by OPEC ministers.

The report forecasts that non-OPEC supply would amount to 58.2 million barrels per day by 2017, some 1 million barrels per day lower than in the previous forecast.

But even if markets begin to rebalance as low oil prices are hurting high-cost non-OPEC producers, prices are unlikely to return above $100 per barrel until 2030-2040, according to one of the sources.

The decade between 2030 and 2040 would be the first period when OPEC will see its global market share rising to 40 percent from the current 33 percent.