Oil may collapse to $40 if OPEC cancels production cuts

Market experts fear that oil prices may drop significantly next year. The main reason for this scenario is the possible cancellation of OPEC+ current production restrictions.

Some analysts, based on forecasts of relatively weak growth in oil demand, believe that the complete lifting of restrictions will lead to a sharp drop in prices, possibly up to $ 40 per barrel. This is more than 40% below current levels.

Such a situation, according to experts, can provoke a price war between manufacturers, similar to the one that was observed during the pandemic. At the same time, many analysts believe that OPEC+ is likely to adhere to a gradual lifting of restrictions, rather than a sharp transition to maximum production volumes.

The oil cartel has recently shown discipline in complying with voluntary production cuts. In September, OPEC+ postponed the planned gradual increase in production for two months to support oil prices. In early November, the alliance decided to postpone the increase in production for a month again.

Today, Brent crude futures reached $72.50 per barrel, while WTI rose 0.40% to $68.75 per barrel.