Leading supermarkets have cut the cost of their petrol again. Asda, which reduced its petrol by 2p a litre last Saturday, knocked another 1p a litre off its petrol today. This means its petrol will cost no more than 114.7p a litre, with diesel remaining unchanged at 119.7p a litre Morrisons, which took 2p a litre off its petrol and diesel yesterday, said it was reducing its petrol by a further 1p a litre.
Iran’s president has said the sharp fall in oil prices is the result of “treachery”, in an apparent reference to regional rival Saudi Arabia, which opposed production cuts to lift prices. Hassan Rouhani told a cabinet meeting the fall in prices is “politically motivated” and a “conspiracy against the interests of the region, the Muslim people and the Muslim world”. “The people of the region will not forget such conspiracies, or in other words, treachery against the Muslim world.”
BP shares were down 2% as investors reacted to the company's failure to win a US Supreme Court battle over oil spill compensation claims. The price of Brent crude fell to $66 a barrel due to oversupply fears.
Oil prices will stay at about $65 a barrel for at least half a year until OPEC changes its collective production or world economic growth revives, said the head of state-run Kuwait Petroleum Corp. Oil is trading in a bear market as the US pumps at the fastest rate in more than three decades and global demand expands more slowly. OPEC decided on November 27 to maintain its output target, prompting a drop in European benchmark Brent crude to less than $70 a barrel for the first time since May 2010. “I think oil prices will stay around the current level of $65 for six or seven months until OPEC changes its production policy, or recovery in world economic growth become more clear, or a geopolitical tension arises,” Nizar Al-Adsani, KPC’s chief executive officer, said at a conference in Kuwait City.
Iran expects oil prices at five-year lows will put “short-term pressure” on the government’s budget even as it strives to contain inflation, President Hassan Rouhani said. Crude prices have declined about 40% from a June peak amid overproduction and slower demand growth. The Organization of Petroleum Exporting Countries decided on November 27 to maintain its production target, prompting a drop in European benchmark Brent crude to less than $70 a barrel for the first time since May 2010.
Stock markets, oil companies, service companies and investors are reeling from Saudi’s shock decision not to support a cut in OPEC production in order to balancesupply and support prices, and the consequent slump in oil prices. This stance is a radical departure from Saudi’s previous behaviour when supply and demand fell modestly out of balance. In the past, a few words of support have been enough to have the oil traders scurrying back to their desks to close their short positions. Why the change of policy on this occasion?
Brent extended losses from a four-year low as Saudi Arabia offered customers in Asia record discounts on its crude, bolstering speculation it’s defending market share. West Texas Intermediate dropped in New York. Futures fell as much as 0.8% in London and are headed for a second weekly decline. State-run Saudi Arabian Oil Co. cut its differential for Arab Light sales to Asia next month to $2 a barrel below a regional benchmark, according to a company statement.
Last month, I wrote about how the drop in the oil price will require operators in the UKCS to consider more carefully how they collaborate with each other. Operators should equally be considering how a continued period of low oil price will affect their relationships with contractors in the oil and gas supply chain. The UK Oil and Gas Industrial Strategy published in March 2013 identified the vital contribution of supply chain contractors to the continued development of the UKCS both through working with operators to enhance performance and efficiency and through the development of new technologies.
West Texas Intermediate crude fell, trimming the biggest rally since August 2012 as investors weighed OPEC’s decision to let the market curb a global supply glut. Brent slid in London. Futures dropped 0.7% in New York, decreasing for the fifth time in six days. The Organization of Petroleum Exporting Countries may hold an emergency meeting in the first quarter of next year, Venezuela’s Foreign Minister Rafael Ramirez said in an interview. The group’s failure to cut output at a gathering last week bodes well for US producers, according to billionaire wildcatter Harold Hamm, a founding father of the nation’s shale boom.
Plunging prices at the pumps have failed to arrest the slide in petrol purchasing. Petrol sales in October 2014 fell when compared with October 2013 despite pump prices falling more than 8p a litre over the 12-month period, Government figures highlighted today by the AA showed. The statistics also showed that petrol sales for the first 10 months of this year have fallen 20% compared with the same period five years ago.
Brent crude traded above $80 a barrel after China, the world’s second-largest oil consumer, cut interest rates for the first time since 2012 to bolster its economy. West Texas Intermediate also rose in New York. Futures gained as much as 2.3% in London. The People’s Bank of China cut lending and deposit rates effective from tomorrow, according to a statement on its website. Half of the 20 analysts surveyed predict the Organization of Petroleum Exporting Countries will reduce output, while the rest expect no change, when the group meets next week.
The slump in oil prices is a boon to China as the world’s second-biggest oil consumer. It’s a different story for the country as a major producer. The slide in prices to a four-year low threatens to cut spending, production and profit for the country’s oil companies including PetroChina Co (857) Brent, the global benchmark, has fallen 26% this year to below $83 a barrel. The decline, amid signs that global supply is outpacing demand, is pressuring profits from oil extraction across the globe. After a flurry of acquisitions and spending that’s stretched the balance sheets of Chinese oil companies, the country will also have a diminished appetite for deals, according to Sanford C Bernstein & Co.