There are several reasons why OPEC members in general – and Saudi Arabia in particular – are likely to be sanguine about the recent slump in the price of oil. Output will therefore continue to respond to the state of demand rather than be manipulated in an attempt to control prices. The price of oil may recover a little ground over the remainder of the year as the worst fears about the global economy prove overdone, but we expect further declines in 2015 and beyond.
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