"For the first time, media is resisting oil price fall. Moreover, disputes between Republicans and Democrats in the US can sway oil prices. Therefore, it is predicted that oil prices would reach $70-90 in the coming months," Iranian Oil Minister Bijan Namdar Zangeneh said as quoted by SHANA, the ministry's official website.
According to the minister, OPEC can influence the oil prices through the lever of supply.
Meanwhile, oil prices have slipped "to fresh 5-1/2-year lows" on Monday, January 5, Reuters reports. The media outlet notes that Russia's oil production hit a post-Soviet record last year (approximately 10.58 million barrels per day), citing Energy Ministry data. Iraqi oil exports had also reached their highest levels in December 2014 since 1980, Reuters stresses, adding that OPEC members are still unwilling to cut their petroleum production.
"The current situation with oil price is really very simple. Demand is down because of a high price for too long. Supply is up because of US shale oil and the return of Libya's production. Decreased demand and increased supply equals low price," said US energy expert Arthur Berman in an interview with Oilprice.com.
However, major petroleum producers are suffering severely from the current slide, the expert points out, stressing that oil prices should be "around $90 to attract investment capital."
"The price of oil will recover. Opinions that it will remain low for a long time do not take into account that all producers need about $100/barrel. The big exporting nations need this price to balance their fiscal budgets. The deep-water, shale and heavy oil producers need $100 oil to make a small profit on their expensive projects," Arthur Berman told Oilprice.com.
The expert emphasizes that only conventional producers will be able stay in business if oil prices remain at $80 or lower for a long period of time.
However, this would inevitably lead to the reduction of global supply and a rise in oil prices, Mr. Berman concludes.
