Lagos — The Organization of the Petroleum Exporting Countries, OPEC says oil prices will hit $40 per barrel at the quarter of the year.
According to Mohamed Arkab, Energy Minister of OPEC’s rotating president Algeria, oil prices may recover faster than expected post coronavirus pandemic, adding that there would be a gradual lifting of lockdowns around the world in the second half of the year.
He explained that the global economy will not stay paralysed for too long.
“Together with the 9.7 million bpd cuts, OPEC and its allies pledged for May and June, these factors are set to lift the price of oil in H2 2020” Arkab said.
Mr. Arkab pointed that China which is now recovering from the pandemic and has lifted the lockdown“ is driving up global demand.”
Oil prices have crashed below $30 per barrel since the start of the pandemic in China last year.
Analysts say the OPEC+ 9.7 million barrels per day cuts billed to kick-start May 1 came too late to have an immediate impact on the already flooded market.
And as world economies battle to stay afloat, the market currently suffers lack of storage due to glut despite the cuts which already began ahead of the scheduled date- a pointer to why prices is yet to recover.