OPEC lowers oil price outlook amid economic uncertainties

VIENNA - The Organisation of the Petroleum Exporting Countries (OPEC) said Thursday oil prices would not rise above $85 until 2020, significantly lowering its forecast amid uncertainties about the global economic recovery.

OPEC Secretary General Abdalla Salem El-Badri said it was unclear how economies would perform and how demand would develop after government stimulus packages run out.

“It is a fragile recovery,” he told reporters at the cartel’s Vienna headquarters.

Last year, the group had predicted an oil price ranging between $70 and $100 per barrel (159 litres) over the next 10 years. In this year’s outlook, the range is $75 to $85.

But the producers’ group said economies had improved enough over the past year to warrant slightly increased mid- and long-term demand forecasts.

Consumption is now expected to rise to 89.9 million barrels per day (bpd) until 2014, up 5.4 million bpd from 2009 usage.

The new projection is 800,000 bpd higher than last year’s because the economic outlook is now “far brighter in most parts of the world than a year or so ago,” El-Badri wrote in the report.

OPEC also raised its forecasts through 2025, although the 2030 demand figure was nearly unchanged at 105.5 million bpd.

While consumption in developed countries was expected to fall in the next two decades, growth would come mostly from developing Asian countries.

The 12-country group said its share in the global market would rise to 40 percent by 2030, up from 36 percent this year.

The cost for adding more production capacity is considerably higher in developed countries than in OPEC member states.

Policies in the US and European Union that push for fuel efficiency and higher bio-fuel use could dampen demand for OPEC oil, the group pointed out, but said oil would still account for more than 30 percent of the energy mix in the coming years.

“Changes to road transportation technologies will be evolutionary, not revolutionary,” the report said, pointing to insufficient research, development and manufacturing efforts.

The current internal combustion engine would continue to be the dominant technology, OPEC said.