Abdulla al-Badri, Secretary-General of Organization of Petroleum Exporting Countries (OPEC) has predicted that oil prices will surge towards USD200 per barrel, but without defining a specific time. After five years of stability, oil prices started declining steadily from June last year when they were recorded at around USD110 a barrel.
Considering the current oil prices at around USD45-USD55 per barrel as the “market’s bottom”, al-Badri feels that the situation will discourage further investments in new oil production as oil companies are cutting back on capital budgets. It can lead to a cut in oil supply and consequently cause drastic price increases.
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