A panel of national representatives reviewed OPEC’s oil market outlook for 2015 this week, OPEC sources said, preparing the ground for a policy-setting meeting next week that will decide how to address a looming oversupply of crude.
The Economic Commission Board concluded a two-day meeting in Vienna on Friday ahead of the gathering of the group’s oil ministers on Nov. 27. It does not recommend policy to the ministers.
The panel reviewed the supply and demand forecasts published in the oil exporter group’s monthly market report, which predicted lower demand for OPEC crude in 2015 and oversupply in the market if OPEC maintains its current output.
“It was a general discussion on the 2015 outlook,” one of the OPEC sources said.
Oil prices have fallen by 30 per cent since June to around $80 a barrel, alarming some OPEC members.
But an agreement on a cut in the group’s output at next week’s meeting is by no means certain, not least because top exporter Saudi Arabia has yet to say whether it supports one.
Delegates expect a difficult meeting, and analysts are split over the outcome.
“This meeting will be probably one of the toughest ever,” one delegate said.
OPEC’s latest oil market report, published on Nov. 12, forecast that demand for OPEC crude next year would fall far below its current output because of the U.S. shale boom.
It pointed to a supply surplus of 1.8 million barrels per day (bpd) in the first half of 2015 if OPEC keeps output at the October rate of 30.25 million bpd. It estimated demand for OPEC crude averaging 28.45 million bpd.
Two OPEC officials, Libya’s OPEC governor and another delegate who declined to be named, earlier told Reuters the 2015 outlook indicates OPEC needs to cut output, giving figures between 500,000 bpd and one million bpd.