Oil price decline may have run its course, OPEC says

Abdulla al-Badri, the secretary general of the Organisation for Petroleum Exporting Countries (OPEC), has claimed that oil prices could be on the rise very soon.

Speaking in London on Monday, Al-Badri suggested the second-biggest decline in oil prices might be approaching its end.

"Now the prices are around $45-$50 and I think maybe they reached the bottom and will see some rebound very soon," Badri was quoted as saying by Reuters.

Oil prices have fallen almost 60% since June, as an oversupply pushed the prices of both West Texas Intermediate and Brent crude below the $49 mark.

In November, OPEC decided against cutting production to ensure it retained market share against its competitors, a move which was widely criticised by the non-members of the 12-country cartel.

Al Badri, however, defended OPEC’s decision, claiming that reducing production would lead to spare production capacity and a lack of investment, which would in turn pave the way for a drastic increase in oil prices.

"Suppose we cut production, and then we'll have spare capacity," he said.

"Producers, when they have excess capacity, they will not invest.

"If they do not invest there will be no more supply, if there is no more supply there will be a shortage in the market after three-four years and the price will go up and we'll see a repetition of 2008."

OPEC’s secretary general warned that the prices of crude could rebound as high as $200, if circumstances forced the hand of producers, way higher than the record-high of $147 a barrel it hit in 2008.

"Maybe we will go to $200 if there is a real shortage of supply because of the lack of investment," he said.