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OPEC Predicts Sharp Drop in Oil Investment
The oil industry will cut its spending 22% to $521 billion this year, predicts the Organization of the Petroleum Exporting Countries.
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The oil industry will cut its spending 22% to $521 billion this year, predicts the Organization of the Petroleum Exporting Countries.
The cartel says the result will be tighter petroleum supplies and higher prices in the "very near future," which will restore balance to oil market in 18-24 months.
The group concedes the current market, where supply outstrips demand, is squeezing profits for the entire oil industry. Producers, including OPEC, have been reluctant to cut output because they want to defend their market share against newcomers, notably North American shale-oil producers.
OPEC says today's low oil prices have encouraged more consumption. The group forecasts annual demand will grow by 1.3 million barrels in 2016.
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