Exclusive: OPEC confidential report sees market share squeeze to 2019
(Reuters) - Global demand for OPEC's crude oil will remain under pressure in the next few years, the producer group said in an internal report, potentially fuelling a debate on its strategy of defending market share rather than prices.
The draft report of OPEC's long-term strategy, seen by Reuters, forecasts crude supply from OPEC - which has an output target of 30 million barrels per day (bpd) - falling slightly from 2015's level until 2019, unless output slows faster than expected in rival producers.
OPEC governors, official representatives of the 12 members of the Organization of the Petroleum Exporting Countries, met at the group's Vienna headquarters on Wednesday to approve the final draft of the report.
The 44-page report, marked "CONFIDENTIAL," includes an annex containing comments from two members, Iran and Algeria, suggesting OPEC return to its old policy of propping up prices at a desired level by adjusting supplies.
"Reaching agreement on a fair and reasonable price of oil for the next six to 12 months" is one of the steps that Iran recommends OPEC take. "OPEC production ceiling should be set for six or 12 months intervals."
OPEC oil ministers meet on Dec. 4 to decide whether to extend the strategy of allowing prices to fall to slow higher-cost rival supply. Since November 2014, when the group adopted that policy, OPEC production has risen but prices have deepened their collapse, hurting oil revenue.
The report sees only a gentle recovery over the next few years in oil prices LCOc1, which have more than halved to $50 a barrel since June 2014 due to plentiful supply.
OPEC's basket of crude oils is assumed in the report at $55 in 2015 and to rise by $5 a year to reach $80 by 2020.