OPEC concerns affect crude oil standings
With the global demand for crude oil floundering, representatives from OPEC have voiced their concerns over the oil commodity’s tumbling futures.
Crude oil prices fell more than 3% in New York and London today, amid persisting worries over Greece’s potential default on its debt. OPEC’s recent meet in Dubai sparked some harsh criticism towards Europe’s inability to handle its deteriorating debt situation and the E.U.’s largely inconclusive conference in Poland that was supposed to yield solutions for the issue.
OPEC has issued warning to the economically-floundering western nations, stating that if the economy does not receive a much-needed revival soon, billions of dollars in crude oil investments will be put at risk. The warning continued to state that severe changes to the stimulus strategies need to be made to solve unemployment issues that are crippling Europe and the U.S.
Both investors and producers have significantly lowered their expectation for crude oil demand growth for the year, as global economy looks increasingly glum.
The New York Mercantile Exchange reported a 3.23% decrease in crude oil futures, with the product settling at $85.12 per barrel. This year so far has seen the oil commodity fall 6%.
“Both OPEC’s criticisms and the deteriorating situation in Greece have driven the futures of crude oil into the ground,” said commodities analysts from Summit Energy in the U.S.
OPEC currently produces more than 40% of the world’s crude oil, and its projected supplies for the next few years need to be justified by the improved situation of their oil investments.
Libya’s re-entry into the market will also play a part in the situation. Several Gulf countries which had to increase production to replace the crude oil coming from the addled nation will now have to decrease in order to keep markets in harmony.
OPEC is also currently reeling from the arguments it experienced in December, when Iran and Saudi Arabia debated whether an increase in production was in order. A consensus still has not been reached on the issue.
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