© Fadel Gheit
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The oil prices remain inflated by fears of potential supply destruction due to the global tension. There is a vast of supply in the market and demand growth continues to be weaker than expected, while supply exceeds expectations. Moreover, the pullback in oil prices, expected by many people to surge instead of declining, as a result of what is happening in the Middle East, is a strong indication that the market is oversupplied.
What turning point could the meeting between Russian Energy Minister Novak and officials from the OPEC at an annual summit possibly signalize?
The situation development will very much depend on the outcome of this meeting and the final conclusion. OPEC currently feels that they need to cut production next year in order to prevent further decline in oil prices.
What other factors might influence oil prices performance in the nearest future?
The biggest single factor would be whether or not the US government will allow oil exports from the US. In case that happens, oil prices could fall sharply by more than $10.
What is your forecast for oil prices at the end of this year?
If we put a scenario by which the US will leave the oil export ban, and if we assume that Libya will resume their export, the prices would be below $80, not above $90 or $100.