OPEC+ DEAL members, the extended group of OPEC (Organization of the Petroleum Exporting Countries) including Russia and American counties made a deal to increase the volume of crude oil production this year to control over oil prices. This decision, if could be fulfilled within time with an expected volume, will definitely pull down oil price by next year.
The expected hike the production minimum 2 billion dollar higher than last year’s 94 b/d. If the predicted volume could be reached by this year, it will definitely make a good balance in world oil market with a surplus.
This will also confirm the volume that was reached before the COVID-19 break out last year.
It is predicted by the experts that the oil price will get the highest peak in next quarter with Brent oil reaching $75 per barrel and WTI oil $72. Forecast says, a fall down in price is obviously expected after the peak.
David Fyfe, the chief economist at Argus, said that there is also an alternative chance that OPEC+ DEAL members will not materialize an additional increase in oil production within this year for the shortfall of storages.
However, If the hike in production volume could be accelerated this way, the price may fall down to $60 for Brent oil and $57 for WTI by 2022.
Bottom Line: If OPEC+ DEAL will increase the crude oil production by this year, oil prices will cut down to $15 per barrel in average by next year after a highest peak in next quarter.