FORTRADER: The OPEC meeting unsurprisingly did not bring any positive results for bullish traders. The Iranian Minister of Oil described the outcome of the cartel’s meeting in one phrase: ‘Everyone does as they please.’
Is there a danger that oil prices could fall to new lows? How far could oil prices decline?
OPEC Meeting Will Push Oil Prices Below $40 per Barrel
Alexander Grichenkov, MFX Broker analyst: Oil prices could indeed fall further, as OPEC continues to flood the market in an attempt to increase its market share and drive out non-cartel producers (especially US shale companies).
The latest meeting clearly shows that despite record low oil prices, the organization is not considering reducing production volumes. The cartel’s output has exceeded its quota for 19 consecutive months, by as much as 1.5 million barrels per day. In such conditions, oil prices may temporarily drop below $40 per barrel for Brent until there are tangible effects on deepwater and shale production segments.
However, even in the medium term, current price levels are not adequate from the perspective of supply and demand balance or for ensuring at least minimal profitability for oil production projects.
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- Oil – Forecasts and Trading
About Oil Prices
- Why Oil Prices Fell: False Rumors from Bloomberg + Results of the OPEC Summit
- Oil Price Forecast: Technical Analysis of WTI – CLx for December 7, 2015
FAQ
Will oil prices continue to fall?
Yes, due to OPEC’s continued production policies, prices could go lower.
How long will the price drop last?
It depends on market reactions and changes in production strategies.
What impact does OPEC have on oil prices?
OPEC’s production decisions significantly influence global oil prices.
