The Organization of the Oil Exporting Countries significantly reduced its outlook for crude prices in the next few years in its annual World Oil Outlook published Tuesday.
The 14-member oil producer group now assumes its OPEC reference basket price will reach $60 a barrel by 2020. Last year, OPEC's oil price assumption was $80 a barrel in 2020.
In both years, OPEC saw prices rising by $5 a year, but it is starting from an average price of $40 a barrel for the reference basket in 2016, compared with a $55 a barrel average in 2015.
The OPEC reference basket is made up of a number of crude oil products from member states and is typically lower than the international and U.S. benchmarks by a slight margin. The reference basket price fell to a 2016 low of $22.48 in January, while Brent sank to a multiyear low of $27.10 the same month. West Texas Intermediate bottomed out at $26.05 in February.
OPEC notes the outlook is not necessarily a forecast or desired price path, but an assumption it uses to guide its reference case.