CRUDE OIL PRICES UNLIKELY TO RECOVER BEFORE 1999

Europe Energy, September, 1998

The Centre for Global Energy Studies (CGES) has warned that the price of Brent crude, the North Sea quality reference, stands little chance of recovering before the end of the year, owing to the widespread failure of OPEC countries to respect pledges to reduce production, and extensive reserves.

The Organisation of Petroleum Exporting Countries (OPEC) has only honoured 66% of its commitment at the end of June to reduce production by 1.365 million barrels per day (mbd). A month after the organisation's decision, OPEC members had reduced production by only 836,000 mbd. Growing crude oil reserves are having an increasing effect on a market suffering sluggish demand linked to the economic crisis in Asia. Moreover, OPEC efforts to cut back production have been...

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