Oil Prices will Stabilize in the Middle of 2015

• 03.09.2015, 21:26
•  World

OPEC’s General Secretary Abdalla El-Badri said that the global oil prices will return to balance in the second half of 2015, because the demand of crude oil growth up and high cost producers trim output amid lower prices, Bloomberg reports. The General Secretary also added that consumption will increase by 1.2 million barrels a day after rising more slowly in 2015 than it was expected last year only 1 million barrels a day.

The lower prices have positive effect on the energy importing countries, such consumers as China and India. Cheaper crude is a boom for them. OPEC countries can still have revenue under cheap supply, while non-OPEC countries are struggling. Their supply growth has raised by 6 million barrel a day since 2008, while production by OPEC members has remained at about 30 million barrels. OPEC pumped 30.6 million barrels day in the beginning of the year, only Saudi Arabia gains 163,000 a day.

Abdalla El-Badri recommended OPEC countries to continue doing investments in oil production, while diversifying their economies at the same time. For this the countries have enough budgets to invest also in different industries rather than oil. OPEC made more than $1 trillion in revenue from 2010 to 2014 when a barrel was $100. Now the price is the half, which means less revenue and this means stiff budget. For some countries it can be big challenge to set new reforms and measures for the economy development directions. For instance, Kuwait is in a critical situation, because the revenue from crude oil is 94 percent of GDP. Most of the Persian Gulf nations have the same problem.