• 2 minutes Oil prices going down
  • 11 minutes China & India in talks to form anti-OPEC
  • 16 minutes When will oil demand start declining due to EVs?
  • 37 mins Oil prices going down
  • 6 hours We Need A Lasting Solution To The Lies Told By Big Oil and API
  • 6 hours Another WTH? Example of Cheap Renewables
  • 1 day Trump Hits China With Tariffs On $50 Billion Of Goods
  • 2 days Bullish and bearish outlook for oil
  • 2 days Rolls Royce shedding 4,600 jobs
  • 3 days After Trump-KJU, Trump-Putin Summit
  • 3 hours What If Canada Had Wind and Not Oilsands?
  • 2 days When will oil demand start declining due to EVs?
  • 1 day Russia's Rosneft 'Comfortable' With $70-$80 Oil Ahead of OPEC Talks
  • 6 hours The Wonderful U.S. Oil Trade Deficit with Canada
  • 10 hours China & India in talks to form anti-OPEC
  • 3 days U.S. Cars Will No Longer Need 55mpg Fuel Efficiency By 2025.
  • 5 hours The Permian Mystery
  • 3 days Epic Fail as Solar Crashes and Wind Refuses to Blow
  • 2 days OPEC soap opera daily update
Venezuela Won’t Have Enough Oil To Export By 2019

Venezuela Won’t Have Enough Oil To Export By 2019

GlobalData recently projected that Venezuela’s…

The Fourth Industrial Revolution Is On The Horizon

The Fourth Industrial Revolution Is On The Horizon

The Fourth Industrial Revolution is…

Analyst: Expect $30 Oil In 2018 Unless OPEC Deepens Cuts

OPEC

Oil prices could plunge to US$30 a barrel in 2018 and maintain that low price for some two years, if OPEC fails to make steeper output cuts, Fereidun Fesharaki, chairman of oil and gas consultancy FGE, said at a conference on Monday.

The current OPEC cuts could be enough to keep the price of oil at around US$50 per barrel for the rest of this year, Fesharaki said at the International Association for Energy Economics conference in Singapore, as quoted by Platts.

But next year, new supply is expected to overtake demand growth if OPEC doesn’t deepen the production cuts. This would send oil prices lower, according to Fesharaki.

Last week, the International Energy Agency (IEA) said that non-OPEC production in 2018 would increase by 1.5 million barrels daily – a rate that would surpass the growth of global demand.

Speaking at the Singapore conference on Monday, FGE’s Fesharaki said that the key question for the oil market was whether U.S. shale production had a limit. If there is a limit, OPEC’s cuts might work, but if there isn’t a limit, or if shale output in Argentina surges, OPEC’s strategy with the cuts would fail, Platts quoted Fesharaki as saying.

In 2018, the surplus is expected to grow, due to higher production in U.S. shale, Nigeria, Libya, and Kazakhstan, according Fesharaki. Russia, on the other hand, would be a wild card, because upstream investments are expected to increase there, he noted.

Within OPEC, it’s only Saudi Arabia that has the capacity to cut deeper, and it would be up to them to decide, according to Fesharaki.

Related: Big Oil Opposes Trump’s Budget Plans

“If Saudi Arabia believes there is a limit to US production, they will cut... critical decisions will have to be taken [by Riyadh] in the middle of next year or towards the end of next year,” Platts quoted Fesharaki as saying.

Despite the fact that OPEC and non-OPEC partners rolled over the cuts into March 2018, the oil market wasn’t enthusiastic about the extension as-is, and oil prices have dropped some 13 percent since the cuts were extended.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • Me on June 20 2017 said:
    Banks and Wall Street to blame for this situation. Banks lending cheap money and Wall Street greed searching for yield. Mentality will never change.
  • Citizen Oil on June 20 2017 said:
    With all the nonsense going on with plans of surging production with so many players the only solution is to let the market sort itself out naturally . The US shale is committing suicide again, their stocks are getting hammered daily and the banks are making the same mistakes lending to these idiots. Hammer it down to $ 30 for 5-10 years and teach them another hard lesson. These guys are being given a second chance at getting a reasonable oil price and they are squandering it.....again. OPEC should take what they can while they still have a market at all.
  • Janie on June 19 2017 said:
    Seriously? With breakeven at $65? Is this just for the trading bots?

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News