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OPEC struggles against rivals

August 11, 2015

The Organization of the Petroleum Exporting Countries has admitted its policy of keeping oil output high has only had a limited impact on rival suppliers. OPEC raised its forecast of oil production in non-member states.

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Oil field derrick
Image: Getty Images/J. Raedle

OPEC on Tuesday said countries outside the organization would produce more oil in 2015 than predicted in its earlier forecasts, sending a signal to economists that the sharp drop in crude prices was taking longer than expected to deal a severe blow to US shale drillers and other competitors.

"US onshore production from unconventional sources is currently expected to decline only marginally in the second half of 2015, while US offshore production is to grow due to project startups," OPEC said in a statement.

In its latest monthly report, the organization forecast no additional demand for its own crude oil this year despite faster global growth in consumption as a result of a pickup in the US economy and other nations.

Iran to join the equation

Oil prices fell again on Tuesday, reflecting sentiment across commodity markets after China devalued its currency which analysts interpreted as a sign of economic weakness in the Asian state.

Crude prices have been falling for weeks owing to a global supply glut. Oil is currently trading below $50 a barrel, close to its 2015 low after an 18-perent drop in July.

The World Bank said Tuesday the oil price might drop by another $10 (9 euros) per barrel once Iran fully returned to the market after the lifting of all Western sanctions.

hg/pad (AP, Reuters)