Oil prices continue to slip up as fears grow for global economy
Major oil producers from the region, analysts say, would be closely watching the fast-dropping commodity prices on the international markets which saw the benchmark Brent crude fall to near $101 a barrel yesterday (Tuesday).
Prices of gold, silver, copper and oil have been declining in recent days on indications the global economy is slowing down, yet again.
The experts said producers from the Organisation of Petroleum Exporting Countries (Opec) would not like to see oil prices drop below $100 a barrel as this would eat into their budget surpluses and cut the levels of their spending on infrastructure projects.
“The cost of oil production is rising and the pain threshold is getting higher. Some producers can sustain it — Saudi Arabia, for example, which produces 9 million barrels per day, as the (rising) dollar makes up for the fall in price. But, others like Iran, Iraq and Libya cannot,” Kate Dourian, Middle East editor for global energy information provider, Platts, told Gulf News.
Saudi Arabia’s oil minister said last month that around $100 a barrel was a “reasonable” price for consumers and producers alike.
Robin Mills, a Dubai-based oil expert, on Saurday, told Gulf News that Saudi Arabia would cut its crude output to defend the $100 per barrel price for oil.