OPEC oil report expects steady rise in prices
The average price of a barrel of oil is expected to stand just above $65 in 2021 as compared to $45 today, according to OPEC’s World Oil Outlook 2016.
The report was unveiled on the second day of the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) yesterday.
It came after industry leaders expressed optimism about recovery on Monday. Record-low oil prices have hit the finances of oil-developing countries hard.
OPEC Secretary-General Mohammed Sanusi Barkindo said oil producers had hit the “bottom” and survived, but warned they had to stop cutting and invest in research and exploration again.
The OPEC report said prices would not hit $92 per barrel until 2040 – still lower than mid-2014 when they were $100-plus.
Barkindo said: “The lower oil price envi- ronment is expected to see overall nonOPEC supply decline between 2016 and 2017, before slowly rising again by 2021.”
The report also focused on oil consumption. Developing countries will lead the demand in the long term, increasing close to 25 million barrels per day to reach over 66 million barrels per day by 2040.
Barkindo said: “Aviation demand growth is expected in every region, par- ticularly in China and India, as the growing middle class push demand for aviation services.”
Oil analyst Robin Mills, CEO at Dubaibased Qamar Energy, said he did not believe oil prices would hit $90 per barrel in even 25 years’ time.
He said: “Reaching $65 per barrel by 2021 is not unreasonable, I do not see it going much higher in the short term.
“But reaching around $90 per barrel by 2040, that I do not see happening.
“I don’t think the market will pick up at that rate, it will take much longer, more years to actually reach the $90-100 mark.
“The cost of production is going down, so I don’t see that hike happening by 2040. With supply, I believe non-OPEC supply decline may only last for short period.
“I do not expect it to be long term.”