On Friday (21 November) OPEC’s Economic Commission Board concluded a two-day meeting in Vienna before the group of oil ministers meets on Thursday (27 November) this week. A panel of national representatives analysed the cartel’s oil market outlook for 2015 last week, thus readying the ground for a policy-setting meeting this week. The meeting is expected to finally address a looming oversupply of oil.
As a result of the oversupply in the global markets, oil prices have gone down by 30 percent since June to approximately $80 a barrel, which raised concerns among some OPEC members. However, the internal decision within the OPEC to cut down the group’s production at this week’s meeting will depend on OPEC’s biggest exporter, Saudi Arabia, which still has to express its willingness to decrease output. While representatives anticipate a challenging meeting, analysts disagree on its possible outcomes. “This meeting will be probably one of the toughest ever,” an anonymous source said.
OPEC’s most recent oil market report that was published in mid-November expects that the demand for the group’s oil next year will plummet below its current production because of the U.S. shale revolution. OPEC expects that there will be a supply surplus of 1.8 million barrels per day (bpd) in the first half of next year if the group keeps its production at the October rate of 30.25 million bpd. According to the latest OPEC report, the demand for OPEC crude is estimated to be around 28.45 million bpd.