(Alexander Zemlianichenko Jr./Bloomberg)
Fuel Fix: Wood Mackenzie: Just 0.1 percent of global crude output shuttered by cheap oil
HOUSTON — The world’s oil producers aren’t rolling over for $35 oil.
Though crude is cheaper than during the financial crisis seven years ago, global oil prices haven’t fallen far enough yet to force oil producers to shut in more than 0.1 percent of the world’s daily supply, a new oil-field analysis shows.
Energy research firm Wood Mackenzie says on a daily basis, 3.4 million barrels around the world currently lose money but only 100,000 barrels have actually been shut in. The world gets at least 1 million barrels a day more than it needs.
That suggests oil prices if oil prices stay at current levels, the oil market will have to wait out the slow, natural decline in worldwide crude production before the large oversupply that has kept prices low for months can be corrected.
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WNU Editor: With Iran now wanting to ramp up production, one can only surmise that prices will continue to stay low. For countries like Venezuela and Nigeria that are dependent on high oil prices .... this is not what they want to know.
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