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Oil to stay depressed until summer – OPEC

Monday, 02 February 2015 6:01 PM [ Last Update: Monday, 02 February 2015 6:01 PM ]

OPEC members say prices may stay depressed until summer.

OPEC member states have issued fresh warnings that oil prices may stay depressed until summer.

Reuters has quoted OPEC delegates, who are gathering for a policy meeting in the Organization’s HQ in Vienna this week, that no serious rise in oil prices should be expected within the next few months because the market is still saturated and the global economy is still weak.

Nevertheless, they say the fresh gains in prices show that Saudi Arabia's strategy of curbing the output growth of rival producers might have started achieving tangible results.

Oil prices climbed on Monday, adding to powerful gains made on Friday.

Benchmark Brent crude was up 70 cents at $53.69 a barrel by 11:30 a.m. EST (1630 GMT), after swinging in a wide band of between $55.62 and $51.41.

US crude was also up 43 cents at $48.67 a barrel after hitting an intraday high of $50.56 and session low of $46.67.

"The low prices are affecting the investment of some companies in shale oil. This should affect the supplies in the longer term,'' one OPEC delegate told Reuters.

"Prices are stabilizing around $40 to $45, but the world economy is not very strong and stocks are too high.''

Two others said they could not rule out prices dropping to as low as $30-$35 due to weak demand combined with global refinery maintenance in the first and second quarters of 2015.

Oil prices have fallen by almost 60 percent of their highs in June 2014. Experts blame a supply glut driven by US shale projects as well as production by non-OPEC producers for the record price plunge.

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