U.S. oil prices dropped to a four-year low Tuesday, and unless OPEC can come up with a substantive agreement to boost prices by spring, a plunge to $35 a barrel is possible next year, says Tom Kloza, founder of Oil Price Information Services.
That would represent a 52 percent plummet from Wednesday morning's level of $73.58 for January crude futures on the Comex. The contract touched $73.30 earlier.
OPEC meets Thursday to discuss output, and
Kloza told CNBC he anticipates at least a "lip service agreement" for lower output, but he doesn't see the cartel's membership abiding by the accord. And that means bigger trouble in about six months, Kloza warns.
"When you look at the second half of 2015, that's when you see oil beginning to dwarf demand by about 1 million, 1 1/2 million barrels a day," he said.
"Thirty-five dollars is a possibility if they don't get an agreement next spring because that's when the oil really starts to build, and you can have 1 billion barrels of oil with really no place to put it."
Given the explosion of oil production outside OPEC and sluggish oil demand in much of the world, the cartel has little ability to lift prices, many experts say.
"OPEC is watching and not acting because there is literally very little it can do," Sadad alHusseini, a former executive at Saudi Aramco oil company
told The New York Times.
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