Shale oil drillers will be hurt by the fall in crude prices before members of OPEC because their costs are higher, according to the group’s secretary-general, Bloomberg said Oct. 29.

As much as 50% of tight oil output will be “out of the market” at current prices, while OPEC is not in a critical situation, Secretary-General Abdalla El-Badri said at the Oil & Money conference in London that day.

“First of all, will be the tight oil” affected by the drop in prices, El-Badri said. “If prices stay at $85, we will see a lot of investment, a lot of projects, a lot of oil going out of the market.”

Crude collapsed into a bear market this month as Saudi Arabia and other producers deepened price discounts for their oil. Global supplies are rising as the U.S. pumps the most oil in almost three decades and Russia’s output nears a post-Soviet record. While U.S. shale oil producers say they can still make a profit at $80 a barrel (bbl), banks including Barclays Plc (NYSE: BCS) predict crude will rebound above $100/bbl next year as output slows.

Front-month Brent crude futures, the global benchmark, fell 25% from their peak this year on June 19 to trade at $86.95/bbl on the ICE Futures Europe Exchange in London at 11:49 a.m. This plunge does not accurately reflect the balance between oil supply and demand, El-Badri said.

“We see that demand is still growing, that supply is also growing, but the magnitude in the increase in supply does not really reflect this 25% change in the market,” he said. “Unfortunately everybody is panicking.”

Current prices are low enough to slow some drilling for shale oil in the U.S., Paul Horsnell, head of commodities research at Standard Chartered Plc (LSE: STAN.L, OTC: SCBFF), said by email Oct. 28. A lack of new sources of production would eventually drive prices up until exploration becomes profitable again, according to Eugen Weinberg, head of commodities research at Commerzbank AG (OTC: CRZBY).

If oil remains between $80/bbl and $100/bbl U.S. shale oil producers will be fine, according to David Lesar, chairman and CEO of Halliburton Co. (NYSE: HAL), the world’s biggest provider of fracking services.

OPEC must be ready to raise production because “whatever the price,” tight oil output will peak between 2019 and 2020, El-Badri said. “From that period, OPEC must be ready to produce about 40 million barrels a day of oil.”

OPEC, which supplies about 40% of the world’s oil, will need to produce between 29 MMbbl/d and 30 MMbbl/d next year to satisfy demand, compared with production of about 30 MMbbl/d currently, he said.

OPEC is next due to meet to review its production target on Nov. 27 in Vienna. The current target of 30 MMbbl/d has been in place since January 2012.