OPEC predicted oil prices to rise to $40

The Organization of Petroleum Exporting Countries (OPEC) expects the price per barrel of crude oil to be around $40 by mid 2020. This was announced on Sunday, April 26, by Algerian Minister of Energy, OPEC President Mohamed Arkab.

He noted that such a forecast is related to several aspects. Firstly, the reduction of oil production within the framework of OPEC+ agreement. Secondly, the recovery of the economies of the countries that will go through the coronavirus pandemic and will start to recover.

“The world economy will not remain so paralyzed. For example, China is consuming 11 million barrels a day, and the recovery is real. Transport is picking up again, and that will lead to global demand,” Arkaba quoted the TSA website as saying.

In addition, Arkab cited a report by the International Energy Agency, which predicts a return to the norm of $35-37 per barrel from May.

Earlier that day, Russian Energy Minister Alexander Novak presented his forecast of oil prices. He is convinced that the world economy will grow and the prices for hydrocarbons will go up in the second half of the year.

On 20 April the price of WTI oil with delivery in May fell to negative values for the first time in history.

Following WTI quotations Brent temporarily went down too and even for the first time since December 11, 1999 the price dropped below $16 per barrel. Later the mark managed to recoup these losses, and trading on the London Stock Exchange ICE as of April 24 closed at $21.8 per barrel.

On April 12, OPEC+ countries agreed to reduce oil production by 9.7 mn barrels per day in May-June this year, by 7.7 mn in the second half of the year and by 5.8 mn further until the end of April 2022.