The price of oil has plummeted to 40 dollars per barrel, which is one of the lowest points of oil prices in over two decades.
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KHOBAR, Saudi Arabia/TEHRAN, Nov 23 Saudi Arabia’s cabinet said on Monday it was ready to cooperate with OPEC and non-OPEC countries to achieve market stability, days before OPEC meets to review its year-long policy of not supporting prices. While upstream companies are affected directly by fluctuations in crude oil prices, the impact on midstream MLPs is more indirect. OPEC made its position abundantly clear – it won’t reduce its output to artificially increase oil prices unless it’s joined by other oil-producing nations.
Energy analysts say prices will be further pressured when Iranian oil returns to the market in the coming months, exacerbating oversupply woes. “Maybe we will go to $200 if there is a real shortage of supply because of the lack of investment”, he said at the start of this year.
Brent crude, the global oil benchmark, was up 8 cents, or 0.2%, at $44.74 a barrel on London’s ICE Futures exchange.
On Friday, oil prices turned higher after industry group Baker Hughes reported that the USA oil rig count fell by 10, sparking a few optimism that oil production in North America is tapering down.
The world’s largest holder of proved crude oil reserves has been keeping its oil output high in an effort to maintain global market share against a US fracking boom that’s disrupted oil prices in recent years.
Flynn said much of the market action appeared technical in nature, with the January Nymex WTI contract moving lower to largely fill the gap left on the continuous futures chart after the expiration of the December contract at $40.35 a barrel last week.
“The main players in the petroleum market must certainly reach an agreement about the levels of production”, Algerian Prime Minister Abdelmalek Sellal said. Rather than accounting for the realities of the supply-and-demand dynamics, traders are moving oil according to momentum, patterns, and, of course, historical pricing.
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Investors continue to be pessimistic following the release of data about commercial stockpiles of US crude oil that rose by 0.3 million barrels, or 0.1%, to 487.3 million barrels in the week ended on November 13.
