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OPEC internal report warns oil prices to remain depressed – WSJ

FXStreet (Mumbai) - The supply glut scenario in oil markets will continue to persist even if OPEC slashes its output levels, an internal OPEC report prepared ahead of Friday’s crucial meeting warns.

The Wall Street Journal (WSJ) exclusively reviewed the cartel analysis, which hints oil prices to remain under pressure in the near future.

OPEC’s secretariat states in a transcript of its meeting that took place last week to prepare the summit, “overall the current surplus, while easing, should continue to cap the upside in oil prices for the coming quarters.”

As reported by WSJ, “The document shows that, if current production remains unchanged at 31.5 million barrels a day, markets will still be oversupplied by 700,000 barrels a day in 2016—though that would be less than the glut of 1.8 million a barrel a day OPEC estimates for this year.”

“The document, however, shows members such as Algeria, Iran and Venezuela, disputed the conclusions of the report. On the other hand, the analysis vindicates views from Saudi Arabia that a production cut would be ineffective.”

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