Tag Archives: Oil Prices

OPEC Leader Vows To Not Cut Output

The de facto leader of OPEC has told the press production of oil will not be reduced even if the prices fall to $20 a barrel.

Ali al-Naimi, Saudi Arabia’s Oil Minister, is basically telling the world that the group is now focused on maintaining their market share in light of the U.S. shale oil boom.

“It is not in the interest of OPEC producers to cut their production, whatever the price is,” al-Naimi told the Middle East Economic Survey. “Whether it goes down to $20, $40, $50, $60, it is irrelevant.”

The most shocking comment from the man who is considered one of the most influential figures on the oil market was that the world may never see $100 a barrel oil again.

“We have entered a scary time for the oil market and for the next several years we are going to be dealing with a lot of volatility,” Jamie Webster, oil analyst with IHS Energy told the Financial Times. “Just about everything will be touched by this.”

Oil prices have tumbled almost 50 percent since June because of both a huge supply gain from U.S. shale output along with decreased demand in Europe and Asia.  The market dove more than a dollar after the comments from al-Naimi.

OPEC had been well known for cutting production when oil prices fall in an attempt to keep up profit margins.  When the U.S. was in the midst of recession in 2008, OPEC cut production to raise prices to make it harder on the U.S. during the economic downturn.

Oil Prices Tumbling; Global Economy Slowing

World oil prices are continuing a downhill slide amid fears the world economy is slowing and could go back into recession.

Brent crude oil fell to near four-year lows and the US standard, West Texas Intermediate, lost more than a dollar.  Brent has lost almost 28 percent of its value since June.

The slide comes as economic news makes it appear the world is facing another slowdown or possible recession.  China’s consumer inflation fell to a five-year low this week and prices for U.S. producers fell for the first time in a year.

Also, US crude oil inventories rose at a level almost four times higher than previously estimated by analysts.

The news led to downward rallies on Wall Street with the Dow losing hundreds.

World leaders from oil producing countries are calling for emergency meetings to try and stop the slide in oil prices.    The International Energy Agency is cutting predictions for oil growth in 2015 as a result of the recent conditions.