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Supply and demand haven’t reacted as strongly to oil’s slump as expected, and that means oil prices will stay lower for longer.
That’s according to OPEC, which said Tuesday we can expect a weak rebound in crude prices over the next four years, the Wall Street Journal reports. Part of that has to do with falling output from US shale fields, which will push up OPEC’s total share of the global market.
OPEC expects prices to average about $40 a barrel this year, with prices rising by $5 a barrel in the medium term and ultimately hitting $60 a barrel by 2020. That’s a full $20 a barrel less than 2015’s baseline figure, and OPEC attributes this weakness to lingering effects of the financial crisis and high oil taxes. [WSJ]
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