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How will oil prices develop?

Как ще се развият цените на петрола?
Oil prices fell more than 3 percent on Tuesday to a six-month low on concerns about oversupply and after U.S. economic data showed an unexpected rise in consumer prices.

Brent crude futures for February delivery were down $2.79, or 3.7%, at $73.24 a barrel. U.S. West Texas Intermediate crude futures for January delivery fell $2.71, or 3.8%, to settle at $68.61 a barrel.

U.S. crude oil production is hitting record highs these days, putting further pressure on the OPEC+ group, which is seeking to keep oil prices above $80 a barrel, ensuring "market stability."

OPEC+ and its leader Saudi Arabia face a well-known dilemma of how to counter rising US production and prevent it from undermining the alliance's efforts to support prices.

"Record-high US oil production is a huge problem for OPEC+," Sankey Research's Paul Sankey told CNBC after the latest OPEC+ meeting.

U.S. crude oil production is expected to grow by 1.02 million bpd to 12.93 million bpd in 2023 and by 180,000 bpd to 13.11 million bpd in 2024. says a report by the US Energy Information Administration (EIA). U.S. crude oil production hit a current all-time high of 12.31 million barrels per day in 2019.

"Saudi Arabia's solution may simply be to 'sink' rising non-OPEC+ production by flooding the market with crude oil and thereby driving oil prices below break-even levels in the US," Sankey said.

But if OPEC+ wants to keep oil in the $80 to $100 range, it will need to continue managing supply for the next five years, according to the expert, who added that peak oil demand this decade is a "mirage."

"Oil demand will not peak until at least 2030, if it does it will be a huge surprise for the oil market," he is emphatic.

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