Prices of Crude Oil Getting Lower by June

• 03.23.2015, 16:52
•  World

There is prediction that by the end of the second-quarter of 2015 prices of crude oil could trade between $35 to $ 40 a barrel. Brent was trading $54.42 a barrel on 23 March, which is lower by 1.63%. US crude was trading by $45.59 a barrel, which is lower by 2.10%, Ibtimes reports. 

The prices in the oil market can drop by $5 in case US and Iran  reach a nuclear deal, the deadline of which is March 31.

The low prices can have a huge negative impact on poor OPEC members such as Venezuela. As for Saudi Arabia, such predictions are not made. The total cost of oil production in Saudi Arabia is around $3 to $5 a barrel in contrast to shale producers which have a minimum $40 cost for a barrel.

In case Iran comes back to the market, it would like to increase its oil production to the pre-sanction level, which means 1.2 million barrels per day production. So, it will decrease prices as well.

Surplus will be recorded in the market , the prices will go down, the only way to survive is either to cut the production level or make a cartel between the producers, where they will discuss the prices and the quantity of production. A new deal has to be made by the market members otherwise the only survivor will be OPEC. In a long-term perspective, there are many possibilities for OPEC to be an oligopoly in the oil market.