DRI-WEFA Inc. today announced the release of its Oil Price Forecast Update, which examines the current dispute between OPEC and the major non-OPEC producers, principally Russia, and the prospect of a new price war.

DRI-WEFA predicts a price war would likely send West Texas Intermediate crude to the mid- or even low teens. Even under fairly optimistic economic expectations, the market is not expected to bail producers out.

According to Michael Lynch, chief energy economist, DRI-WEFA, “Past experience suggests that the probability of a major price war is not high, and that a brief downturn and recovery is the most likely outcome. Previous price wars involved major disagreements among OPEC producers over target prices and market share, with non-OPEC producers promising, and sometimes delivering, small production cuts only in the final instance.”

Lynch concluded, “Thus, although there have been several price wars that depressed prices for a year, the fact that OPEC members and most non-OPEC producers are already in agreement on new cuts implies that the current situation will be resolved fairly soon.”

DRI-WEFA’s latest oil price forecast presents several possible outcomes, including the price paths that would result and indicators to monitor for evidence as to which path the market is following.