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Global demand for OPEC's crude oil will remain under pressure in the next few years, the producer group said in an internal report, potentially fuelling a debate on its strategy of defending market share rather than prices, Reuters reports.
The draft report of OPEC's long-term strategy, seen by Reuters, forecasts crude supply from OPEC - which has an output target of 30 million barrels per day (bpd) - falling slightly from 2015's level until 2019, unless output slows faster than expected in rival producers.
The 44-page report, marked "CONFIDENTIAL," includes an annex containing comments from two members, Iran and Algeria, suggesting OPEC return to its old policy of propping up prices at a desired level by adjusting supplies.
"Reaching agreement on a fair and reasonable price of oil for the next six to 12 months" is one of the steps that Iran recommends OPEC take. "OPEC production ceiling should be set for six or 12 months intervals."
Read alsoReuters: OPEC, non-OPEC discuss risk to oil investment, no output cutsSince November 2014, when the group adopted that policy, OPEC production has risen but prices have deepened their collapse, hurting oil revenue.
The report sees only a gentle recovery over the next few years in oil prices, which have more than halved to $50 a barrel since June 2014 due to plentiful supply.
OPEC's basket of crude oils is assumed in the report at $55 in 2015 and to rise by $5 a year to reach $80 by 2020.
Saudi Arabia, supported by other relatively wealthy Gulf members, led the change in strategy last year. Riyadh shows no sign of changing course, seeing the approach as long-term.
The draft report supports the view that OPEC's market share will rise in the long run as output of shale oil, also known as tight oil, and natural gas liquids (NGLs) is curbed.
"As a result of non-OPEC supply developments, OPEC crude is expected to rise over the long term, reaching 40.7 million bpd in 2040. Moreover, the share of OPEC crude in the world liquids supply in 2040 is 37 percent, which is above current levels of around 33 percent."
Over the long run, as non-OPEC supply growth fades, the report assumes oil will rise further and its nominal price will reach $162, or $95 in 2014 dollars.
Read alsoNovak: Russian oil producers prepared for competition with OPECBut a chart in the report also presents a scenario in which non-OPEC supply is more resilient, putting increased downward pressure on the group's market share and highlighting the uncertainty over future demand for OPEC oil.
"OPEC crude production would reach its lowest point in this scenario at 28.7 million bpd in 2023," the report said.
"The resulting range for OPEC crude in 2040 amounts to 9.4 million bpd, which highlights the challenges for member countries' long-term investment decisions."
The long-term report, prepared by OPEC's research team in Vienna, traditionally cautions that it does not articulate the final position of OPEC or any member country on any proposed conclusions it contains.