OPEC Facing $40 For A Barrel Of Oil?

A customer uses a petrol nozzle to fill up his tank in a gas station at a supermarket in Truchtersheim near Strasbourg August 26, 2012. Credit: Reuters/Vincent Kessler

U.A.E. Sees OPEC Output Unchanged Even If Oil Drops To $40 -- Bloomberg

OPEC will stand by its decision not to cut output even if oil prices fall as low as $40 a barrel and will wait at least three months before considering an emergency meeting, the United Arab Emirates’ energy minister said.



OPEC won’t immediately change its Nov. 27 decision to keep the group’s collective output target unchanged at 30 million barrels a day, Suhail Al-Mazrouei said. Venezuela supports an OPEC meeting given the price slide, though the country hasn’t officially requested one, an official at Venezuela’s foreign ministry said Dec. 12. The group is due to meet again on June 5.



“We are not going to change our minds because the prices went to $60 or to $40,” Mazrouei told Bloomberg yesterday at a conference in Dubai. “We’re not targeting a price; the market will stabilize itself.” He said current conditions don’t justify an extraordinary OPEC meeting. “We need to wait for at least a quarter” to consider an urgent session, he said.



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Update: OPEC to keep pumping ‘even if oil falls to $40 per barrel’ -- Financial Post/The Telegraph



My Comment: I doubt that prices this low will remain for long. Shale oil production and development has put oil prices at a benchmark minimum of $60/barrel, and I expect this to last for a while. But the impact of lower prices will be long lasting and far reaching (see below).



How Countries Around The World Are Coping With Falling Oil Prices -- Huffington Post

Here's What Will Happen If Russia's Economy Keeps Tanking -- Peter Spence, The Telegraph

Opinion: Venezuela squandered oil riches, now faces default -- Christopher Sabatini, CNN

Venezuela reels under failing economy with no signs of improvement -- TBO

Oil Price Winners And Losers In Latin America -- OilPrice.com

Iran Leaders Says US Not Only Target Of Suspected Saudi Oil Price War -- OilPrice.com

Keeping up the fight for market share? Saudi oil production inches up in November -- Al Bawaba

Record oil tankers seen sailing to China amid stockpiling signs -- Fuel Fix

Goldman sees U.S. oil output unscathed as costs decline -- Fuel Fix

New era of cheap oil 'will destroy green revolution' -- The Independent

Will cheap oil kill Keystone? -- Elana Schor, Politico