11/5/2023 0 Comments Opec stands for![]() The purpose of this organization is to manage the supply of the oil around the globe and to make efforts to set the price of the oil in the global market. OPEC is a permanent intergovernmental organization of 13 oil-exporting developing nations that coordinates and unifies the petroleum policies of its Member Countries. The headquarters of OPEC are in Vienna, Austria. But GS Commodities Research still predicts prices would still hit $100 by year’s end.However, currently, the Organization has a total of 13 member countries only after Ecuador, Indonesia, Qatar and Gabon suspended it. In the weakening demand scenario, prices could fall short of the $90 forecast in the next few months. And the US and Russia could increase output even if OPEC sticks to its production levels. OPEC ministers are on guard against the possibility that China’s rebound in demand proves temporary or that other developed nations experience a slowdown in growth or slip into recession. Still, other uncertainties are clouding the outlook for oil prices. ![]() That leaves more room for prices to rise without hurting OPEC demand too much, the report notes. In addition, OPEC is enjoying increased pricing power in the market as US producers remain on the sideline and Russia faces global sanctions over the war in Ukraine. The producer group historically opens the taps when US demand surges, but it rarely adjusts production for demand growth from China, according to the GS Research team’s analysis. The $90 a barrel price the team now expects for the three-month span “may not be high enough to require a June OPEC response,” Struyven writes.įinally, history suggests OPEC will stand pat. Second, the GS Commodities Research team recently reduced its price forecast for Brent crude in the second quarter, reflecting production beats in the US and Russia, a warm winter, and a decline in power plants switching from gas to oil. “The agreement that we struck in October is here to stay for the rest of the year, period,” he said in mid-February. Several of them, including Saudi Energy Minister Prince Abdulaziz bin Salman, have indicated the producer group may keep current production limits in place. The first is OPEC leaders’ own statements. In the report, Senior Energy Economist Daan Struyven writes that three developments suggest that OPEC may keep production flat in the second half of the year or ramp up gradually. In that case, crude prices could climb to $107 a barrel by December and move higher from there, the team predicts. That forecast could prove too conservative if OPEC leaves its current production levels in place after the June meeting, and output from non-OPEC producers also remains unchanged, according to the report. That would result in prices for Brent crude, the global benchmark, hovering at about $90 a barrel in the second quarter, before rising gradually to $100 by year’s end. However, increased demand from China as it lifts COVID-19 restrictions, combined with little increase in non-OPEC production this year, will likely lead OPEC to reverse itself at its June meeting and increase production by 1 million barrels a day, GS Commodities Research predicts. ![]() Oil prices could rise as high as $107 a barrel by the end of the year from about $84 at present, depending on how OPEC responds to emerging market conditions, according to a new report from Goldman Sachs Research.Īt the end of last year, OPEC announced a 2 million barrels a day cut in production in response to slowing global growth and the heightened risk of recession among developed countries.
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