- MarketPulse - https://www.marketpulse.com -

Forecaster Says OPEC Aiming for $50-$60 per Barrel of Oil

OPEC producers have their sights set on a sustained oil price of $50-$60 per barrel, a modest ambition for the first cut in supply by the oil exporting group in eight years, says one of the industry’s top forecasters.

Benchmark U.S. oil prices CLc1 have risen around $4, or around nine percent, to over $48 per barrel since the Organization of the Petroleum Exporting Countries (OPEC) agreed last week to shave output.

“You don’t manage the market unless you have a price in mind,” said Gary Ross, founder and executive chairman at the New York-based consultancy PIRA.

“They are being cautious, they want to see what will happen with shale. But OPEC’s price aspirations only go up over time. They don’t go down.”

The deal marks the return to supply caps for the producer group after a brutal two-year free-for-all when OPEC members ditched output targets and pumped more than the market needed in a price war that bloodied U.S. shale producers.

U.S. oil output fell to around 8.7 million barrels per day in July, the lowest since May 2014 and down over 730,000 bpd on the year, mostly as shale producers hit by low oil prices cut output.

Ross challenged the assumption that a higher price could be self-defeating for OPEC because it will encourage shale producers to boost output.

via Reuters [1]

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza [6]

Senior Currency Analyst at Market Pulse [7]
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza
Alfonso Esparza

Latest posts by Alfonso Esparza (see all [6])