By Aygun Badalova
Growing demand and slower than previously expected non-OPEC supply growth will eliminate the existing oversupply and lead to a more balanced market, which, in turn, will provide support to oil prices, OPEC said in its World Oil Outlook (WOO), published on December 23.
OPEC forecasts oil prices to reach $70 a barrel by 2020.
In the Outlook OPEC Reference Basket (ORB) is assumed to average $55 a barrel during 2015 and to resume an upward trend in both the medium – and long-term. ORB is expected to reach $80 a barrel by 2020.
The price of the ORB in real terms is assumed to rise from more than $70 a barrel in 2020 to $95 a barrel in 2040.
While the average price of the OPEC Reference Basket during the first half of 2014 was over $100 a barrel, it dropped to less than $60 a barrel in December 2014 and has averaged close to $53 a barrel in the first nine months of 2015.
Global oil prices plunged from about $108 in the first half of 2014 to below $40 currently due to glut in markets.
OPEC members failed to reach an agreement on production ceiling on Dec. 4.