“Prices will waver between the $40-50 range as soon as bargain hunting kicks in but we can expect another price drop once the Iranian oil is fully back to the market”, he said.
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However, Pouyanne added that Total had budgeted to meet the continued lower oil prices and ruled out any job losses in the near future.
The Saudis thought they could drive the U.S. firms out of business by pushing the oil price down to $60 a barrel, but the Americans have proved more resilient than expected.
On Monday morning in New York, West Texas Intermediate crude futures were down about 2.7%, and fell to as low as $38.88 per share.
“The overproduction we have from OPEC is going to produce a catastrophe in the price”, argued by Eulogio Del Pino, Venezuela’s Oil Minister.
“The pressure will build on OPEC and oil prices”.
“We don’t accept any discussion about the increase of Iranian production after lifting the sanctions”, Iran’s Oil Minister Bijan Zanganeh told reporters on arrival in Vienna which is hosting Friday’s meeting of OPEC.
Seven years after it suspended its membership, the Southeast Asian country had asked OPEC earlier this year to reactivate its membership as the country aims to benefit from closer ties with oil producers. OPEC and competitors such as Russian Federation have kept production high as they remain locked in a battle for market share.
“OPEC production costs are in any case lower than United States shale producers, how they perform within the market is up to them and should not be a consideration for us”.
The Asia-Pacific region will consume 31.87 million barrels a day of oil in 2015, exceeding demand of 31.28 million barrels from the Americas, the International Energy Agency said in a report on November 13.
The oil cartel announced Friday that it was postponing its decision on the production quota until its next meeting in June, and said it will instead continue to produce at its actual level, instead of the official level of 30 million barrels per day.
With Iran having already locked in 505,000 bpd for 2016, the likelihood is that it will be able to boost the amount it supplies to China next year, assuming that it can sign up other buyers. The move shows that OPEC is clearly aware that its members are pumping in excess of the current ceiling.
It seems with no consensus in OPEC, sentiment for oil has soured further, which could mean lower for longer for the liquid gold.
Another reason for the delay of their decision was the choice of Iran to increase their supply once the western sanctions over its nuclear program are removed.
Despite fresh turmoil in the Middle East as Britain joined bombing raids on IS’s oil fields in Syria, higher production has more than offset market jitters.
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Meanwhile, Christopher Wheaton, manager of the Allianz Energy fund, said the OPEC meeting hasn’t changed anything as the oil production remains unchanged and the oil production quota remains divorced from real-world oil production.
