The average price of crude sold by OPEC members slumped to the lowest in 11 years as members kept pumping into an oversupplied market.
The reference basket of crudes produced by the Organization of Petroleum Exporting Countries dropped to $32.33 a barrel Wednesday, according to an e-mail from the organization’s secretariat in Vienna on Thursday. That’s the lowest since April 2004, according to data compiled by Bloomberg.
Oil slumped after OPEC decided a year ago to defend market share by maintaining production and allowing lower prices to pressure rival suppliers. Saudi Arabia and Iraq, the group’s largest producers, are already pumping close to record volumes, while Iran and Algeria plan to boost output next year. The strategy has come at a cost for the group, which will forgo about $500 billion in revenue in 2015, according to the International Energy Agency.
OPEC members will try to shore up revenue by pumping more next year, Goldman Sachs Group Inc. predicted. The organization will raise output by at least 640,000 barrels a day to 32 million in 2016, driven by gains in Iran and the group’s other Persian Gulf members, the bank said in a report.
Iran plans to boost output by about 500,000 barrels a day within weeks of international sanctions being lifted next year, and eventually add about 1 million barrels a day of supplies, Oil Minister Bijan Namdar Zanganeh said last month. The nation will increase supplies by 285,000 barrels a day in 2016, and can tap about 35 million barrels stored on tankers, Goldman Sachs estimated.
Algeria’s state oil producer Sonatrach Group plans to raise crude output by 5 percent next year, Salah Mekmouche, the company’s vice president of exploration and production, said in an interview in Algiers. The nation pumped 1.1 million barrels a day last month, according to data compiled by Bloomberg.
The OPEC basket is composed of Saharan Blend, Girassol, Oriente, Iran Heavy, Basrah Light, Kuwait Export, Es Sider, Bonny Light, Qatar Marine, Arab Light, Murban and Merey.