Saudi Arabia: OPEC oil prices stabilize in June
June 5, 2015
On 5 June, the average price of the Organization of Petroleum Exporting Countries (OPEC) oil basket stood at USD 62.3 per barrel, which represented a marginal 0.8% decline over the same day of the previous month. On an annual basis, oil prices were down by 41.0%. Oil prices have recovered some of the ground lost since mid-2014 and the 5 June reading marked a 50.2% increase over the USD 41.5 per barrel tallied on 12 January, when oil recorded the lowest price since 2009.
The upward trend in oil prices observed since the start of the year mainly reflected rising political tensions in the Middle East, oil disruptions in key players’ markets and stronger demand, particularly from advances economies. Against this backdrop, some analysts suggested that the global oil glut may have started fading.
At the 5 June meeting, OPEC decided to maintain its oil production quotas at 30 million barrels per day (mbpd), which was largely in line with market expectations. With this move, the oil cartel intends to maintain its market share and squeeze out high-cost producers, particularly the United States’ shale industry. According to the latest report from OPEC, Saudi Arabia’s oil production reached 10.31 mbpd in April, which was up from the 10.29 mbpd tallied in March.