OPEC Secretary General Abdalla el-Badri said Thursday he believed oil prices would see a recovery by the second half of next year but that it was unclear by how much.
Badri told a webcast press conference that OPEC was concerned by the 28% drop in prices in recent months but not panicking, and that fundamentals of oil supply and demand did not justify the plunge.
He warned that a continuation of prices at the lower levels -- Brent crude traded as low as $81.63/barrel on Wednesday after a relentless slide from levels as high as $115/b in mid-June -- would see upstream investment reduced and supply constrained, resulting in a future price spike.
"We are concerned but we are not panicking," Badri said.
"I think the price will rebound by the second half of next year, but I don't know by how much," he said.
"If this will continue, most of the investment will be stopped," he said, referring to the price fall.
He noted that OPEC had undertaken 117 upstream projects worth around $270 billion and downstream projects valued at $70 billion.
"If we stop this, I am sure the supply will decline very soon and the price will shoot up. We are trying to avoid this," he said. "If we don't have investment, we won't have additional supply. It's for the sake of producers and consumers alike that we should invest."
"The fundamentals do not deserve this 28% decline," he said.
Badri declined to predict the outcome of OPEC's upcoming November 27 talks in Vienna or to say what price level might trigger an output cut.
