Middle East Crude Producers to Closely Observe Current Oil Prices
Major producers of oil from the Middle East will be closely watching the quickly falling prices of commodities in foreign markets, especially that of crude as the European benchmark recently dropped to a crude price per barrel of almost $101, said analysts.
The cost of metals, especially gold, copper and silver, have been recently falling on signals that the world economy is once again slowing down.
According to the experts, producers of the Organization of Petroleum Exporting Countries (OPEC) would not like to witness current oil prices falling lower than $100 because that would use up their allocated surplus and reduce their budget allocations for infrastructure and other social programs.
The price of producing oil is increasing and the negative impact (of its higher production cost) is heightening, according to Kate Dourian, Editor of Platts, during her interview with a regional news agency. She added that several producers can keep up, such as Saudi Arabia, which makes a daily output of 9 million barrels tolerable because the increasing dollar compensates for the price fall. However, other nations, such as Iraq, Libya and Iran, cannot sustain global price decreases on this scale.
The oil minister of Saudi Arabia said during the past month that oil prices ranging at about $100 per barrel is a fair price for both producers and consumers.
Robin Mills, an oil expert based in Dubai, recently reported that the largest oil producer, Saudi Arabia, would reduce its production of crude to protect the price of oil at $100 a barrel.