OIL GLUT PUSHES PRICE DOWN

Oil is in the mid­dle of one of its steep­est sell-offs since the fi­nan­cial cri­sis, with prices on the in­ter­na­tional mar­ket fall­ing dras­ti­cally from its June price of $115 a bar­rel.

Qatar Today - - BUSINESS > OIL&GAS -

There are two ex­pla­na­tions: not enough de­mand or too much sup­ply. Sup­port­ing the weak de­mand ar­gu­ment are a stag­nant econ­omy in Europe, slower growth in China and flat gaso­line con­sump­tion in the U.S. Ac­cord­ing to the In­ter­na­tional En­ergy Agency, in 2014 world de­mand for oil will grow only 1.5%. But the big­ger fac­tor ap­pears to be surg­ing global oil pro­duc­tion, which out­paced de­mand last year and is shap­ing up to do so again in 2014. To try to keep prices high, Saudi Ara­bia, the world's big­gest pe­tro­leum ex­porter, has re­duced its oil pro­duc­tion from 10 mil­lion bar­rels a day – a record high – in Septem­ber 2013 to 9.6 mil­lion as of Septem­ber 30. That hasn't done much to raise prices, mostly be­cause other OPEC coun­tries are pump­ing more crude as the Saudis try to slow down. Sharply higher pro­duc­tion in­creases from Libya and An­gola, along with sur­pris­ingly steady flows out of war-torn Iraq, have pushed OPEC's to­tal out­put to almost 31 mil­lion bar­rels a day, its high­est level this year and 352,000 bar­rels a day higher than last Septem­ber.

Newspapers in English

Newspapers from Qatar

© PressReader. All rights reserved.