WORLD: OIL PRICES FALL AFTER PRODUCTION INCREASE

Article Abstract:

A division in opinion at Opec seems to be emerging after Saudi Arabia announced that it will increase oil production by 500,000 barrels per day. Although the country's oil minister said the increase would involve other producers, some Opec members, including Kuwait, Iran and Venezuela, said they had not been warned about the announcement. It is also contrary to an Opec agreement to make production decisions only once a quarter. The unilateral nature of the Saudi Arabian decision and the resulting fall in oil prices of almost 5% to below US$ 30, confirms the country's importance in the world oil market. It has over 2mn barrels of spare capacity, which means it can go ahead with the production increase even without participation from other Opec members.

Market information - general, Organization of the Petroleum Exporting Countries

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Oil at $9 a barrel is a trigger for economic instability

Article Abstract:

A combination of low demand and rising supply has led to a significant drop in the price of Arab light crude oil. However, the price will inevitably rise again at some point. When looking to the future, it is possible to identify changes in supply and demand which should push the price back into its trading range since the late 1980s of between $15 and $20 a barrel. However, demand could be restricted by warm winter weather and the ability of consumers to switch energy sources. There are also strong political and strategic arguments in favour of not being too dependent on a single source of energy.

Supply and demand, Column

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SAUDI ARABIA: OIL PRODUCTION INCREASE REVEALED

Article Abstract:

Saudi Arabia plans to pump into the market an additional 250,000 barrels per day (bpd) of oil, with plans from August 2000 to pump a further 250,000 bpd, a move that created panic within the oil market on 19 July 2000. The Opec cartel previously agreed to support a 500,000 bpd increase in production provided that for 20 working days to 28 July 2000, the oil price index remained over US$ 28. However, the price declined below this level on 17 July 2000 before returning the following day to US$ 28.09.

Production data, Saudi Arabia

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