U.S. crude oil prices slumped below $40/bbl on Friday after OPEC sidestepped action to curb output levels, despite a saturated market.
The oil cartel plans to "continue to closely monitor developments in the coming months," but it won't deviate from producing about 31.5 million b/d in the near-term, Secretary General Abdalla Salem El-Badri of Libya said. OPEC's next general meeting is scheduled for June.
If current crude oil output were to remain unchanged, OPEC has estimated that global oversupply in 2016 should be about 700,000 b/d. In October, the cartel estimated that U.S. crude oil and natural gas liquids output in 2016 would decline by close to 100,000 b/d (see Shale Daily, Oct. 12). The world currently is consuming much less than it is producing.
Energy analysts weighing in following the meeting were pessimistic about the outlook for U.S. oil producers.Read that whole article by clicking here.
Further, from Forbes:
The oil price crash that started a year ago when Saudi Arabia made its decision not to cut production to support higher oil prices accelerated on Monday. Oil prices dropped near seven-year lows. West Texas Intermediate crude fell by as much as 5% on Monday and traded below $38 a barrel. Brent crude, the global benchmark, was down 4.3% and trading for $41.14 a barrel.
Saudi Arabia has spent some $100 billion of its foreign reserves already to wage an oil war against low-cost producers ranging from U.S. shale to Russia and Iran, which seems poised to enter the oil market by force as it is unshackled from Western sanctions as part of the recent nuclear deal with the U.S. and other nations. OPEC is pumping 31.5 million barrels a day and the oil cartel is no longer setting a production ceiling, freeing producers to openly pump as much as they see fit.Click here to continue reading that article.
Connect with us on Facebook and Twitter!