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Oil price falls below $45/b

According to media reports on 22 June, oil prices dropped below $45/b for the first time this year due to concerns about OPEC’s ability to curb over-production. A global crude oil glut has been growing as supply continues to outstrip demand, forcing producers to sell oil cheaper. The OPEC agreement on 25 May 2017 to curb production for a further nine-month was expected to boost oil prices but progress has been patchy at best thus far. While major oil producers such as Saudi Arabia and Russia have kept to the agreement, Libya and Nigeria have added to the volatility with plans to ramp up production.

Commenting on the news, Michael Burns, Oil and Gas Partner at law firm Ashurst said: ‘This is a pretty concerning time for a lot of producers. The OPEC production cuts strategy does not seem to be holding prices and US shale activity appears to be increasing notwithstanding falling prices. ‎The question is whether OPEC will respond with further cuts or whether it needs to look again at its macro strategy for addressing low prices.’

 

News Item details


Journal title: Petroleum Review

Organisation: OPEC

Subjects: Crude oil, Oil production, Oil prices

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