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Where is the oil price going? An expert comments


economy

Where is the oil price going? An expert comments

Volatility in the world markets has extended into oil, which has seen big price fluctuations over the past week, but remains on an overall downward trend.

The world’s lifeblood is in oversupply, and although low prices are forcing some producers out of business, the big pumpers like Saudi Arabia are merrily producing, hoping to force higher-cost competition out of business.

The world’s benchmark Brent Crude has slumped in the last three years eight months. In 2012 it was $118 a barrel. Although the August price has since firmed a little to around $50, it is still off the 2014 average. So where is oil going?

ADS Securities’ Noureldeen Al Hammoury is an expert. With these yo-yoing prices are we likely to see any stabilisation soon, or are some analysts right to predict a sub-30-dollar barrel?” asks euronews’ Ouahiba Kedache.

Nour Eldeen AL-Hammoury:
“We have to look at the current situation where fundamentals are unchanged. We know very well we are not replacing oil any time soon, for a decade at least, world demand is high, and we don’t expect a big fall like last year. The successive price drops are unlikely to repeat themselves, and oil will rise again. This week’s rises are a prelude to a coming stability.”

euronews:
“How big could any fall be?”

Nour Eldeen AL-Hammoury:
“They’ll be similar to the current ones, but we don’t automatically expect the steep falls we have seen in recent days.”

euronews:
OPEC has sat by, deploring the situation but doing nothing…”

Nour Eldeen AL-Hammoury:
“Prices haven’t fallen to collapse levels, Just remember that despite some calling this a great crisis, an OPEC agreement’s in place and it has been intervening in recent days. There’s talk of an extraordinary meeting to discuss the situation, but that might have been put of by this week’s rises. Now it could happen in early December.”

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