Yemisi Izuora/Ijeoma Agudosi
Recent falls in the price of oil are likely to be temporary, says the oil minister for Saudi Arabia, Opec’s biggest producing nation
Ali al-Naimi said commodity price fluctuations were to be expected and said he was hopeful for the future.
He added it was “difficult, or even impossible, for Saudi Arabia or Opec to undertake any measure that would lead to a reduction in [their] share of the market and an increase in of others”.
Oil price watch by oriental news nigeria today shows that the price of Brent crude was just below $63 a barrel, while US crude was near $58.Oil prices, which were well above $100 a barrel in the summer, have slipped because of slowing economic growth in developing nations, particularly China, and an increase in fuel supplies, partly thanks to advances in shale gas extraction.
Oil consuming nations are enjoying lower fuel and food prices, while exporting nations, including Russia and members of the Opec oil producers’ cartel, are suffering big drops in income.
The lower oil price has contributed to Russia’s recent currency collapse as its economy is heavily dependent on oil for revenue.
Opec member Nigeria is also reliant on oil for income and only yesterday Nigerian government presented its 2015 budget which took into account the new, lower oil price.
Meanwhile, the oil and gas industry is beginning to cut back on investment and jobs.
Smaller members of Opec had hoped to see a reduction in output, since a production cut generally lifts the oil price.
However, the last Opec meeting in November concluded without a vote for lower production.
Opec produces about a third of the world’s crude oil, about 30 million dollars a day, of which Saudi Arabia pumps 9.6 million.