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OPEC+ will not allow another collapse in oil prices such as the one we saw in the spring of 2020, Abdelmadjid Attar, former Algerian energy minister who has taken part in many ministerial meetings of the alliance in recent years, told attaqa.net in an interview published on Monday.
OPEC and its non-OPEC alliance led by Russia are meeting on Tuesday to decide how to proceed with easing the collective cuts. The market expects OPEC+ to stick to its current policy and decide to unwind the cuts by another 400,000 barrels per day (bpd) in February.
OPEC+ played an important role in managing supply and the oil market in recent years, the former minister told Attaqa, adding that he hopes the alliance will continue to meet energy demand going forward.
The fight to stabilize oil prices is not over yet, Attar said, because the oil market is currently undergoing uncertainty—again—due to the potential hit to demand from the surging Omicron COVID variant.
This state of uncertainty could continue for another two years due to the pandemic and the decline in upstream investment because of ESG pressures, the former energy minister of OPEC member Algeria told Attaqa.
For Algeria, the ideal price of oil for 2022 would be $80 per barrel, he added.
The current oil price—with Brent Crude trading at just below $78 per barrel early on Monday—is at “a very acceptable level,” according to the former Algerian energy minister.
After 2022, oil prices are set to rise, mostly due to lower investments in oil and gas while global energy demand—including for fossil fuels—continues to rise, he noted.
Algeria’s Attar is the latest industry official warning of higher oil and natural gas prices coming within years as global investments in new production are currently insufficient to replace production volumes that will be lost from depleting and maturing fields.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com