The Organisation of Petroleum Exporting Countries will likely cut production in 2006 to prevent a drop in oil prices next year
The Organisation of Petroleum Exporting Countries will likely cut production in 2006 to prevent a drop in oil prices next year, the Centre for Global Energy Studies said in its monthly report.
"Unless oil demand growth rebounds strongly in 2006, OPEC will face the need to make output cuts in order to defend prices," the influential report said.
"The size and timing of the output cut will depend on the strength of underlying demand growth and the severity of the Northern Hemisphere winter, as well as the price level that the Organisation chooses to defend."
The CGES added: "Even if OPEC avoids having to cut its aggregate output, Saudi Arabia will come under pressure to reduce its own production as other member-countries bring new capacity into production next year."
The CGES said it forecast a "modest" growth in global oil demand next year, growing by around 1.4 percent in 2005 and by a similar amount in 2006.
