For OPEC, painful drop in oil prices this year will bring gains in 2016

While OPEC's fight to snatch market share from rival producers of oil may seem like an expensive failure as prices languish below $ 50 a barrel, a very different picture might appear next year.

Supply outside OPEC is expected to shrink in 2016 for the first time since 2008, coming down to 200,000 barrels per day, according to the International Energy Agency. With the growth in consumption by 1.4 million barrels per day, OPEC's de facto leader of Saudi Arabia can benefit from the opportunity to expand its market share

"To declare its policy failure for OPEC is unthinkable," said Greg Shernou, which manages $ 15 billion as executive vice president of Pacific Investment Management Co. "I do not think you could see Saudi Arabia and OPEC's business plan and model looks like a 6- or 12 months. In the long run, what you'll see is a small non-OPEC supply, more demand and a larger market share for them. "

OPEC in November 2014 deviated from the traditional policy of adjusting supply to control prices, announcing that it will maintain high levels of production in order to defend its market position. This solution has been tested by the collapse of crude oil prices, which has since fallen by more than 40 percent amid a global glut of supply.

Price Benefit
OPEC's share of global oil market has dwindled to the lowest in a decade last year due to growing production from US shale wells. Yet Brent, which traded around $ 46 on Thursday after recovering to more than $ 60 in May, may be beneficial for a 12-nation group as competitors fight for a higher price.

"The worst thing about the strategy of Saudi Arabia was when prices jumped to $ 60, and it seems it will remain there because other manufacturers can learn to live with it," said Paul Horsnell, head of research suroini in Standard Chartered Plc. "For this strategy to work, it needs a further severe downward price correction."

Many US companies for shale oil are burdened by loans that fueled the boom in the industry. Interest payments on their debts are $ 235 billion

Reducing the competitors may be small consolation for the most vulnerable members of OPEC. Weakest - "fragile Five" Algeria, Iraq, Libya, Nigeria and Venezuela - had to cut social spending after a decline in prices and the increasing risk of political turmoil, according to RBC Capital Markets LLC. Algeria is willing to extraordinary conference of OPEC, supported by Libya and Venezuela, but has received no public reaction from Saudi Arabia.

By cutting production, Saudi Arabia will give up market share and loss of revenues in the long term, received support prices will speed the US shale yields, according to Societe Generale SA.

"It was always a long game measured in years, not months," said Mike Uitner, head of research of the oil market of Societe Generale in New York, "you just need to be patient."