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Oil may collapse to $40 if OPEC cancels production cuts


November, 13 2024
watermark Economic news

Market experts fear that oil prices may drop significantly next year. The main reason for this scenario is the possible cancellation of OPEC+ current production restrictions.


Some analysts, based on forecasts of relatively weak growth in oil demand, believe that the complete lifting of restrictions will lead to a sharp drop in prices, possibly up to $ 40 per barrel. This is more than 40% below current levels.


Such a situation, according to experts, can provoke a price war between manufacturers, similar to the one that was observed during the pandemic. At the same time, many analysts believe that OPEC+ is likely to adhere to a gradual lifting of restrictions, rather than a sharp transition to maximum production volumes.


The oil cartel has recently shown discipline in complying with voluntary production cuts. In September, OPEC+ postponed the planned gradual increase in production for two months to support oil prices. In early November, the alliance decided to postpone the increase in production for a month again.


Today, Brent crude futures reached $72.50 per barrel, while WTI rose 0.40% to $68.75 per barrel.


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