Saudi Arabia: Oil prices fall below the USD 50 dollar mark
May 3, 2017
Oil prices continued to decline in recent weeks after hitting an over one-and-a-half-year high in early February. The Organization of the Petroleum Exporting Countries’ (OPEC) oil basket traded at USD 48.3 per barrel on 3 May, a decrease of 4.6% from the same day in April. Although oil prices have recovered 17.8% of their value from the same day in 2016, they are now down 9.3% since the start of the year.
Data corroborating that OPEC countries are complying with the agreed crude output quotas had proved not to be enough to propel oil prices so far this year. Some producers, particularly in Canada and the United States, are taking advantage of higher oil prices compared to the previous years and are steadily increasing shale oil supply. Moreover, inventories remain at historically high levels in many advanced economies, exerting downward pressure on prices. Against this backdrop, analysts expect that OPEC will extend output cuts beyond the June deadline.
According to the latest OPEC Monthly Oil Market Report, combined oil output in OPEC countries in March decreased to 31.93 mbpd from 32.08 mbpd in February, mainly reflecting a reduction in production in Angola, Iran, Libya, Nigeria, the United Arab Emirates and Venezuela. Conversely, Qatar and Saudi Arabia recorded a significant increase in crude production in the same month. Of this, Saudi Arabia produced 9.99 mbpd in March, which was broadly unchanged from February’s 9.95 mbpd.