Decline in oil prices are expected to be short term this month, thus the Organization of the Petroleum Exporting Countries (OPEC) will still maintain its high output policy to defend its share in the global oil market.
Benchmark Brent crude, was trading 13 cents lower at $56 a barrel on Thursday while US crude was priced at $50 a barrel, falling near its lowest in more than three months amid increasing US stockpile and strong dollar.
Brent crude fell close to 12 percent this month due concerns on demand and a nuclear deal signed between Iran and the P5+ 1 countries where a long awaited deadlock between Tehran and the West was finally removed. Investors became wary over the deal as it is believed to spike higher supply from the OPEC members.
Iran hopes to rapidly increase its share in crude exports once sanctions are permanently lifted but delegates from Gulf OPEC believe there will not be significant volumes before 2016.
OPEC delegates from several nations stated that the drop in prices is likely to be short term and will not avert the cartel from its policy of keeping output high to defend market share.
The 12 member oil cartel holds a meeting every six months to discuss their current agenda. During their meeting in November, the Saudi Arabian led group decided to hold its target at 30 million barrels a day in order to boost falling oil prices, while curbing oil output of other high cost oil producers such as shale oil drillers in the US.
"It does seem that the Saudi tactic of beating the US shale oil producers is not being successful," said an OPEC official "but they probably will maintain it," they added.
Meanwhile in a separate report titled "Commodity Markets Outlook,” the World Bank rose its forecast for crude oil prices in 2015 to $57 a barrel from $53 a barrel in April. The bank also added that further geopolitical tensions and the closures of high-cost oils rigs could drive the forecast even higher.