After the deep drop in oil prices during the last year, OPEC did not respond to the price adjustment with production cut and big corps can only thank the cartel as small market players seems to be out of the game.
“We live with a lot of uncertainty and we’re rewarded for how well we manage it,” stated Rex Tillerson, CEO of Exxon Mobil. “If you can’t live with uncertainty, be a librarian”, he added.
After the increase in US oil production, which spurred global challenge on supply side, OPEC and Russia were expected to react with production slowdown to face the US competitor, nevertheless they resisted and black gold prices declined markedly over 50%, still recovering only slightly.
OPEC delegates expressed their expectations, forecasting $70-80 range a barrel to be reached with corrective move on the market, ahead of the OPEC meeting in Vienna at June 5, 2015.
Iraq oil minister Adel Abdel Mahdi informed that he sees “optimism and general acceptance with the current situation”.
Nevertheless “there is consensus among Gulf OPEC countries, and others, to keep the ceiling unchanged,” a senior Gulf OPEC delegate told Reuters later on Tuesday.
Iran remains a question for the OPEC members as its production could lift oil barrels on the market and thus provide additional pressure for oil bears.
As oil department head Bijan Zanganeh stated for Shana news agency,”if OPEC members want to keep prices at the same level, we expect them to make room for Iranian oil.”
Iran is expected to pump to even 1 million bpd later, following the lifting of sanctions. Nevertheless, analysts expect that it could take time for the country to provide commodity in such scale.
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