OPEC has had a very steadfast stance in the dropping price of oil over the past few months. They said that they would not reduce their production levels, and that it was up to other countries to stop producing in order to halt the drop. However, OPEC recently commented that the prices “may have found a floor”. OPEC’s Secretary-General Abdullah al-Badri said, “Oil prices may have bottomed out.” He also went on to warn that if investments in new supplies turned out to be too low, it could cause the price to jump drastically – up to $200 a barrel.
People want to hit the lowest price that oil can go so that it can start to rebound. However, it may be wise to pay heed to OPEC’s warning, and to continue to invest in new supplies so that the world does not see itself in the reverse of this issue – with outrageously high oil prices – in a year or two’s time. Neither too high nor too low is good for the consumers or the economy. It has to strike that sweet balance when it comes to the price. Still, OPEC is not planning to sit down and discuss the potential of cutbacks until the middle of the year, as was expected from them.
Other experts who have been paying close attention to the oil prices also feel that the prices are near their bottom, and that they will likely start a slow and steady rebound before long. They may remain in the $50 a barrel area for while, but many are still hopeful. Yusuke Seta, from Newedge Japan, noted that the open interest for the company Brent have been much higher. He sees this as a very good sign, and so do many others. While it is still too early to tell what will happen for sure, most of the signs do seem to be positive.
How long must the world wait for a real turnaround? It’s really difficult to say, and it won’t likely be until after the midyear meeting with OPEC that the experts can form any viable predictions of what will happen. Hopefully, things will start getting back to normal for oil producers in the country and all of their employees sooner rather than later. All there is to do right now is to watch the market and wait to see what happens.
About Oil Works Inc.
Oil Works, Inc. is a complete drilling rig equipment manufacturer and service provider based in the Permian Basin for over 20 years. OWI’s product and service offerings include Derricks, Substructures, Drawworks, Mud Systems, Walking Systems, Power Generation, Control Systems, Iron Roughneck Repair and Upgrades and complete Rig Solutions built to API and ISO standards. OWI is also proud to offer 24/7 Service and Support.