Oil prices have been dropped for some time now thanks to a decrease in global demand coupled with increased US shale production.
Some of Opec’s members however are not happy with the current state of affairs and have implored the cartel to cut production so prices can rise.
Even the Kuwaiti oil minister conceded that the low price was uncomfortable for Kuwait, despite its status as the world’s lowest-cost producer.
Ali al-Omair explained that the country needed a price of $77 a barrel to fund public spending without borrowing. Bad news with the current pricing sitting at under $60 a barrel.
“We are still surviving — it’s not the situation we prefer, of course. It all depends on the second half now for oil prices”, he said in advance of Opec’s regular production meeting.
Opec however, seems to be ignoring these pleas and is yet to bow to pressure from some of its members. It aims to continue its production levels in a thinly veiled attempt to push the US shale and gas producers out of the market.
It seems to be working with prices rising slowly in the last few months after US shale producers have been unable to compete with the low prices.
A sigh of relief then for the poorer Opec members who have been appealing for a ‘fair’ price and we’ll watch on as the oil prices rise again. It was never going to last forever!