The Organization of the Petroleum Exporting Countries (OPEC) says recovery of global oil prices to above $70 per barrel will not take place for another four years.
According to a report released by OPEC on Wednesday, the organization, which produces a third of the world's crude, said it foresees a "gradual improvement in market conditions as growing demand and slower than previously expected non-OPEC supply growth eliminate the existing oversupply and lead to a more balanced market."
The announcement came at a time that the global benchmark oil price touched an 11-year low of $36.04 on Monday, AFP reported.
In its annual World Oil Outlook report, the Organization of the Petroleum Exporting Countries predicted that oil prices will rise to $70.70 for a barrel of crude in 2020 and to $95 in 2040.
According to analysts, the projections represent a sharp drop in market value compared to last year's report, which predicted a nominal price of $110 for the rest of this decade.
Since one year and a half ago, the global oil market has been rife with various kinds of projections as OPEC largely gave up its past policy of cutting production to support prices, with the price of a barrel of crude plunging more than 60 percent.
Instead of following the traditional policy, the organization aimed to preserve its market shares and push out growing competition from higher-cost shale rock producers in the United States.
According to OPEC’s latest report, shale oil production will only start to "plateau" at 5.6 million barrels per day by 2025 and then decline. It added that low oil prices are only leading to short-term boost in demand.
"The impact of the recent oil price decline on demand is most visible in the short term. It then drops away over the medium term," noted the organization in its report, which was released at its headquarters in Vienna, Austria.
The report also projected the world's total crude demand to hit 97.4 million barrels per day by the end of the decade, an increase of 500,000 barrels per day compared to its forecast from last year.
While OPEC projected that the demand for its oil will increase more than previously forecast over the next five years, it added that the figure will still remain below current production levels.
The organization also announced that demand for its crude oil will reach 30.7 million barrels per day by 2020, an increase of about 1.7 million barrels compared to last year's projections. OPEC is currently pumping 32 million barrels per day.
The organization further stated that it expected its current market share to increase by four points to 37 percent by 2040.
As for trends in the global energy market, OPEC opined that the developing world will account for 63 percent of the total fuel consumption, thus, overtaking industrialized countries of the Organization for Economic Cooperation and Development (OECD).
Natural gas is expected to replace oil and coal, according to OPEC’s report, as the fuel with the largest share of global energy use by 2040, by accounting for close to 28 percent of world demand.
According to OPEC forecast, although use of wind and solar energies is set to grow at the fastest rates, their overall market reach will only be around 4 percent in 15 years from now.