World oil market can see a reiteration of 2008 oil prices collapse, Global Energy Studies Centre (CGES) believes.
In its Monthly Oil report CGES said that the dynamics of oil prices over the next six months will depend on the OPEC, in particularly, on Saudi Arabia, which has effectively been given a free hand to produce as it sees fit in the absence of a meaningful output agreement.
"By acting to ease prices, Saudi Arabia is trying to prevent an oil price spike that could, with several Eurozone economies teetering on the brink, trigger a repeat of the 2008 price collapse, which would be in no OPEC member's true interests," CGES said.
Following the auction dated May 19, the price on Brent futures for August decreased by $0.49 a barrel up to $95.76 per barrel. The cost of WTI futures for August on the New York Mercantile Exchange increased by $0.76 percent to $103.02 per barrel.
World oil prices fell below $40 a barrel by late 2008.
CGES belives that volume of oil that Saudi Arabia needs to produce in the second half of this year will depend on its own price ambitions and on the level of Iran's production.
"Saudi Arabia, meanwhile, sees its recent actions as necessary to meet OPEC's stated goal of stabilising oil prices, which the Kingdom rightly recognises as preventing them from rising too high, as well as preventing them from falling too far," CGES said.
Last week OPEC oil ministers agreed at a meeting in Viena to keep its production level steady at 30 million barrels a day.
Earlier it was reported that Saudi Arabia has assured the U.S. and EU that it can boost production and replace the oil, which Iran sells to the world.
The European Union will impose a full embargo on Iranian oil imports from July 1.
