Arab Today, arab today saudis slam irrational oil price as market tanks under 27
Last Updated : GMT 12:27:18
Arab Today, arab today
Arab Today, arab today

Saudis slam 'irrational' oil price as market tanks under $27

Arab Today, arab today

Arab Today, arab today Saudis slam 'irrational' oil price as market tanks under $27

Saudi Arabia, the biggest producer within the 12-nation Organization
London - AFP

The world's biggest oil exporter Saudi Arabia declared this week that ultra-low oil prices were "irrational" as crude hit new 12-year lows under $27 on the global supply glut.
The market's dramatic slump culminated on Wednesday with New York crude collapsing to $26.19 per barrel -- a point last seen in May 2003.

London Brent oil also skidded to $27.10 -- the lowest level since November of the same year.

Prices have since recovered somewhat to sit at $31 heading into the weekend, but traders remain on edge after another rocky week.

Oil turned higher as OPEC kingpin Saudi said the market had "overshot" itself, while traders also digested eurozone stimulus hopes and a weaker-than-expected increase in US oil inventories.

Saudi Arabia is the biggest producer within the 12-nation Organization of the Petroleum Exporting Countries (OPEC).

"The price itself is irrational," said Khalid al-Falih, chairman of state-owned oil firm Saudi Aramco, at the World Economic Forum in the Swiss ski resort of Davos on Thursday.

- Higher than today -

"I do feel that the market has overshot on the low side and that it is inevitable (that it will) start turning up.

"Where will we be by year-end? I don't know but certainly I would bet that it is going to be higher than where we are today."

The world remains awash with oil supplies, a situation that has been fuelled by OPEC's refusal to curb crude output in order to squeeze out high-cost US shale producers.

The Saudi-backed strategy is also aimed at pressuring non-OPEC member Russia -- the biggest global oil producer -- and force fellow OPEC member Iran to trim output.

OPEC left its collective production ceiling unchanged, in both June and December 2015, at 30 million barrels per day. Estimated actual output stands at 32 million bpd.

So far this year, prices faced a rapid descent as concerns also snowballed over the strong dollar and weak demand in the faltering world economy -- particularly in Asian powerhouse China.

In a gloomy omen this week, the world's stock markets went into meltdown -- with many entering bear territory of 20 percent below recent peaks -- as investors took flight on global economic woes and collapsing oil prices.
"Market sentiment continues to reflect concerns about supply and demand," said Accenture research specialist Damien Cox.

"The story remains dominated by the oversupply as OPEC production continues apace and US shale output proves seemingly remarkably resilient.

"Fresh concerns over a slowing global economy have added impetus to the downside in recent days. The slide in equities maybe reflects a more pessimistic macroeconomic outlook which in turn hints at lower energy demand."

Russia was among the hardest hit this week, with its ruble currency slumping to a record low against the dollar. The nation's energy-reliant economy has already been pushed into recession by low oil prices and Western sanctions over Ukraine.

- Price war -

"The decision made by OPEC's main player, Saudi Arabia, not to cut supply in order to protect its market share, triggered a price war," noted Dr Nikos Paltalidis, finance lecturer at Durham University Business School.

"By pushing prices to such low levels, high-cost countries, such as Russia, Iran and shale-oil producers in the United States, will face severe pressure to close down unprofitable investments."

He added: "The main target from this policy is to force Russia and Iran to curb the production of oil.

"OPEC's share of the world oil market is only 30 percent, down from almost 60 percent 20 years ago, and they want to increase their share in the global oil market."

Saudi Arabia and other rich Gulf state OPEC members can cope with a period of low oil prices.

However, poorer OPEC nations like Nigeria and Venezuela want lower output in order to lift prices and boost their precious revenues -- and have both reportedly called for an emergency meeting.

"We have the most resilient capacity ... to take whatever the market serves us," added Saudi Aramco chief Falih in Davos.

"If price continue to be low, we will be able to withstand it for a long, long time.

"Obviously we don't hope for that -- but we have prepared for it. We have the lowest cost production in the planet."

 

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today saudis slam irrational oil price as market tanks under 27 Arab Today, arab today saudis slam irrational oil price as market tanks under 27

 



Arab Today, arab today
Arab Today, arab today Nohan Seyam designs beautiful accessories

GMT 20:02 2017 Tuesday ,21 February

Nohan Seyam designs beautiful accessories
Arab Today, arab today Tourism shows signs of recovery

GMT 09:59 2017 Monday ,20 February

Tourism shows signs of recovery
Arab Today, arab today Sarah Belamesh designs antiques of "ceramic"

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"
Arab Today, arab today Top Yemen commander killed

GMT 09:55 2017 Wednesday ,22 February

Top Yemen commander killed
Arab Today, arab today To probe sexual harassment claims

GMT 10:08 2017 Tuesday ,21 February

To probe sexual harassment claims
View News in Arabic - Business: نفط وبتروكيماويات
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today To hold social dialogue over secondary school

GMT 07:43 2017 Wednesday ,22 February

To hold social dialogue over secondary school
Arab Today, arab today 63-Year-Old Woman Delivers Baby

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby
Arab Today, arab today Milan laughs while Rome cries

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Nissan enhances sales in most markets

GMT 14:08 2017 Monday ,20 February

Nissan enhances sales in most markets
Arab Today, arab today Competes Sweden and Germans by S90

GMT 22:36 2017 Thursday ,16 February

Competes Sweden and Germans by S90
Arab Today, arab today Janat pleased for issuing 'Good Morning'

GMT 06:41 2017 Monday ,20 February

Janat pleased for issuing 'Good Morning'
Arab Today, arab today Small ponds have outsized impact

GMT 15:53 2017 Tuesday ,21 February

Small ponds have outsized impact

GMT 06:34 2017 Sunday ,19 February

Ahmed Fahmy stresses he did not ignore singing

GMT 06:50 2017 Wednesday ,15 February

Tragic fluctuations of Bakhtiari's life revealed

GMT 12:22 2017 Monday ,20 February

Kanye West puts hijab-wearing model

GMT 14:06 2017 Friday ,17 February

London to tax old cars

GMT 23:29 2017 Thursday ,16 February

Home built on sand castles-style costs $8m

GMT 05:15 2017 Tuesday ,21 February

Omega 3 can reduce asthma cases

GMT 19:16 2017 Friday ,17 February

Aziz House ready to host the tourists

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 12:39 2017 Monday ,20 February

newest smartphone another winner for Huawei

GMT 16:08 2017 Wednesday ,15 February

Shawsh reveals her collection "Jewelry of dreams"
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday