Reports: World oil prices at their lowest levels in two years and may continue to decline below $ 100 a barrel
Reports: World oil prices at their lowest levels in two years and may continue to decline below $ 100 a barrel
Tuesday, 07 October 1 / Okrudolf 2014 18:05
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Price of oil reached its lowest level in two years, influenced by global economic conditions, including the current events in the Middle East.
According to economic reports that “the price of oil continued to decline gradually since mid-July of this year, while the price of Brent oil per barrel to $ 115, and reached its price today of $ 95, to become the Brent oil trading level of $ 100 and less since the months after the trading levels of $ 110 for half a decade after the financial crisis. ”
She noted that “even during this period mentioned, dropped the price of Brent to $ 100 for just a few days in two periods during the years 2012 and 2013,” indicating that “the current decline in prices reflects an amendment to the imbalance in the oil markets, rather than a reduction in the geopolitical risk.”
According to these reports that “compared to the beginning of this year, oil supply has increased dramatically which pushed crude oil prices to decline.”
According to the Energy Information Administration, “the global supply of crude oil and fuel reached the highest volume of the two which 92.6 million barrels per day, in the month of August / August, it was producing countries are stable, such as the Gulf Cooperation Council (GCC), and in particular Kuwait and the UAE, are the main contributor to increased supply. ”
Kuwait raised the size of its production from 2.8 million barrels per day at the beginning of this year to 2.9 million barrels per day in September, and announced that it is likely to raise the volume of their production to three million barrels per day in the next month.
It also raised the size of the United Arab Emirates also produced this year from 2.7 to 2.9 million barrels per day.
In contrast to these two countries, Saudi Arabia has reduced the size of its production this month by 5%, which is the highest percentage decrease carried out by Saudi Arabia in two years in order to support prices.
But factor Differential in this period shows that the producers undecided in Africa and the Middle East has registered a remarkable increase in their production, such as Nigeria and Angola, which were behind 60% of the rise in the volume of oil production last month, and also such as Iraq and Libya, which in spite of the political events in the two countries have seen an increase in their output.
As for Saudi Arabia, was the decline in the volume of production low to affect oil prices, it is unlikely that the Saudi Arabia cut production more than the current level due to the higher exchange in Saudi Arabia, and the United States, has also increased oil reserves.
It is expected to increase production in a stable of producers in Africa or the Middle East due to political instability in these countries, as happened in Libya, where he was arrested the production of the largest oil field during the month of September due to the escalation of political events, but in the event of continued high levels of production World countries may agree “OPEC” to cut production, which is what was done in 2008.
And a stronger global economy will pay the price of oil to rise, but global demand is still low, has slowed this year as major economies after the United States, the euro zone, China and Japan.
The United States did not import oil the size that was imported, and return it essential to increase domestic production.
It is not expected to rebound in global growth this year and is also influencing factor in oil prices, in addition to the energy agencies have issued its forecast last month not to demand the recovery of the world’s oil.
Moreover, increases the strength of the dollar from a slowdown in demand for oil because it makes petroleum products more expensive for importing countries to him, and I’ve already announced, “OPEC” intention to cut production because supply exceeds demand, but any reduction of “OPEC” may not be enough to return oil prices to their previous levels.
It appears that the main contingent of the price increase may be the erosion of the crisis in the Middle East, otherwise, it is likely that oil prices will remain at $ 100 or less due to low global demand and a lack of coordination between the members of the “OPEC” Ended
alliraqnews.com
