OPEC+ Faces 5-Year Fight to Avoid Price Meltdown

OPEC+ will need to carefully control prices for another five years to prevent a “meltdown” in prices, according to Rapidan Energy Group, cited by Bloomberg.

• “Soggy fundamentals will require effective OPEC+ supply management over the next five to keep oil prices in an $80-$100 range,” Rapidan said. “We assume OPEC+ will successfully manage the market in the run-up to tighter conditions later this decade.”
• The rapid growth in non-OPEC supply will put pressure on OPEC in the coming years, despite peak oil demand not expected for another decade.
• It estimates that non-OPEC growth will be around 0.7m b/d each year to 2030.
• OPEC, with 5m b/d of spare capacity – around 5% of global supply - must therefore calibrate its return carefully, Rapidan said.
• This will be possible after 2030, when non-OPEC growth will slow and markets tighten, it said.