Crude oil prices are likely to bottom out in the first half of 2015, until a possible slowdown in U.S. shale production counters a supply glut exacerbated by OPEC’s decision not to cut output, a Reuters monthly survey showed On December 22.
The Organization of the Petroleum Exporting Countries’ agreement last month to stand pat on output meant the onus for any supply cutbacks was now on non-OPEC producers, primarily led by U.S. shale oil, analysts said.
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Oil is seen recovering in the second half as non-OPEC production responds to lower prices, while demand picks up in the course of the year, the poll showed.
The survey of 30 economists and analysts projected Brent LCOc1 to average $74.00 a barrel next year and $80.30 in 2016.
The forecast for 2015 is $8.50 below the average projection in the previous Reuters poll. The November poll number was down $11.20 from October, marking the biggest downgrade in average forecasts since the 2008 economic downturn.
Brent this month hit five-year lows below $60 a barrel, down almost half from peaks reached in June. Brent has averaged $100.57 so far this year.
Brent was up 74 cents at $62.12 on Monday. U.S. crude CLc1 was up 66 cents at $57.79 a barrel.
Meanwhile, the UAE oil minister urged all of the world’s producers on Sunday not to raise their oil output next year, saying this would quickly stabilize prices, Reuters said on December 22.
“We invite everyone to do what Opec did and take a step to balance the market through not offering additional products in 2015, and if everyone abides by (the) Opec decision, the market will stabilize and it will stabilize quickly, ” Suhail Bin Mohammed Al Mazroui said.
He was speaking to reporters on the sidelines of a meeting of ministers of the Organisation of Petroleum Exporting Countries in Abu Dhabi.
Opec’s decision late last month to leave its output ceiling unchanged, rather than cutting it, was followed by a fresh plunge of oil prices.
Iranian Oil Minister Bijan Zangeneh said last week that the continuing price slide was a “political conspiracy”; Iran needs a high oil price to ease pressure on its state finances.
But Mazroui said on Sunday: “There is no conspiracy, there is no targeting of anyone. This is a market and it goes up and down.”
Oil prices rose in early trading on Monday as Asian markets opened strongly into a holiday-shortened week and as consensus spread that Brent crude prices would likely remain above $60 for the rest of the year.