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LequteMan
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Nigeria - Following recent boosts, crude oil prices have climbed to $60, nearly half their peak of $107 in June last year. According to Businessday, the figure could fall as low as $10 to $20 and here’s why:
US economic growth has averaged 2.3% a year since the recovery started in mid-2009 — about half of what you’d expect in a rebound from the worst recession since the ‘30s.
Meanwhile, growth in China is slowing, is minimal in the eurozone and negative in Japan. Throw in the improved petrol consumption of US vehicles and other conservation measures, and it’s clear why global oil demand is weak and might even decline.
At the same time, output is climbing, thanks in large part to increased US production from hydraulic fracking and horizontal drilling. US output rose by 15% in the 12 months to November from a year earlier, based on the latest data, and imports declined 4%.
And there is something else in the mix: the eroding power of the Opec cartel. Like all cartels, the organisation is designed to ensure stable and above-market crude prices. But those high prices encourage cheating when cartel members exceed their quotas. For the cartel to function, its leader — in this case, Saudi Arabia — must accommodate the cheaters by cutting its own output to keep prices from falling. But the Saudis have lost market share when they have done this
#Nigeria #Oil
Read full report here
US economic growth has averaged 2.3% a year since the recovery started in mid-2009 — about half of what you’d expect in a rebound from the worst recession since the ‘30s.
Meanwhile, growth in China is slowing, is minimal in the eurozone and negative in Japan. Throw in the improved petrol consumption of US vehicles and other conservation measures, and it’s clear why global oil demand is weak and might even decline.
At the same time, output is climbing, thanks in large part to increased US production from hydraulic fracking and horizontal drilling. US output rose by 15% in the 12 months to November from a year earlier, based on the latest data, and imports declined 4%.
And there is something else in the mix: the eroding power of the Opec cartel. Like all cartels, the organisation is designed to ensure stable and above-market crude prices. But those high prices encourage cheating when cartel members exceed their quotas. For the cartel to function, its leader — in this case, Saudi Arabia — must accommodate the cheaters by cutting its own output to keep prices from falling. But the Saudis have lost market share when they have done this
#Nigeria #Oil
Read full report here
