Oil has dipped to its lowest price for almost six years. The slide shows no respite. Rather than cutting output to balance the market producers from the Organisation of the Petroleum Exporting Countries – OPEC are offering discounts to customers in an attempt to defend market share.
In just over ten days the price has dropped almost 10 dollars dipping to 45.19 dollars a barrel on Tuesday driven down by rising production particularly US shale oil and weaker-than-expected demand in Europe and Asia.
On Tuesday the United Emirates’ oil minister Suhail bin Mohammed al-Mazroui said OPEC’s decision not to cut output had been the right one. “The strategy will not change,” he said adding, “ we are telling the market and other producers that they need to be rational.”
The crash could encourage traders to hire tankers to store oil at sea to sell at higher prices at a later date.