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Investing.com -- Brent crude oil could potentially fall below $50 a barrel by the end of this year if OPEC+ continues to speed up its production hikes, according to analysts from DNB Markets.
The oil cartel and its allies might also implement larger supply increases in July, August, September, and October if compliance among member states does not improve.
DNB Markets analysts also noted that oil prices need to drop below the long-term marginal cost of supply when OPEC+ is quickly returning production capacity to the market.
They further explained that a lower oil price could assist in re-balancing the oil market and gradually eliminating the OPEC-induced oversupply. This would happen by reducing non-OPEC supply and stimulating oil demand.
The analysts also clarified that the long-term marginal cost of supply refers to the price level that is required to justify investment in new production capacity, especially from higher-cost producers.
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