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Oil hits four-year low after Saudi Arabia cuts US prices


economy

Oil hits four-year low after Saudi Arabia cuts US prices

Oil prices continued to slide on Tuesday. Brent crude was at its cheapest in over four years, close to $82 a barrel at one stage.

That followed Saudi Arabia, which is the world’s top exporter, cutting its prices for the United States; at the same time it increased them for Asia and Europe.

Some analysts saw that as Saudi Arabia signaling its intention to fight for US market share and squeeze the shale oil producers there.

But others feel the price changes reflect market fundamentals and do not have a political motive.

As well as oversupply, the stronger dollar is also pulling down oil prices.

There is no sign that the Organization of the Petroleum Exporting Countries (OPEC) is planning to reduce output in a well supplied market.

The oil cartel will meet on November 27 in Vienna to discuss its output targets for next year.

Members Venezuela and Ecuador are working on a joint proposal to defend oil prices, but the United Arab Emirates oil minister said the group is “not panicking.”

OPEC’s secretary general last week said production next year would not vary much from 2014, and members Iran and Kuwait have said a cut in output at the next meeting was unlikely.

with Reuters

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