ISLAMABAD: Oil prices will rebound rather than extend their decline to as low as $20 a barrel because a collapse since June isn’t merited by global supply and demand, OPEC’s Secretary-General said.
Producers outside the Organization of Petroleum Exporting Countries should be first to reduce their output amid a surplus that’s pushed crude below $50 a barrel, Abdalla El-Badri said in an interview in World Economic Forum in Davos, Switzerland.
Iraq, OPEC’s fastest-growing supplier, said it needs to boost output to compensate for revenues eroded by the price slump, Bloomberg reported.
“The price will not go to $20 or $25, I think the price will stay at where we are now,”
El-Badri said. “We have seen this before, prices coming down very fast and go up very slow.
But prices will rebound.”
Oil slumped almost 60 percent since June as OPEC nations continued pumping amid the highest U.S. production in more than three decades.
The 12-nation group’s decision on Nov.27 to maintain output was based on economics, and wasn’t intended to target U.S. shale drillers, Russia or any other country,El-Badri said.