Oil fall continues as Arab states aim to crush US shale
Opec’s biggest producers in the Persian Gulf are maintaining a strategy that has sent crude below $46 per barrel
By Andrew Critchlow
TelegraphUK
13 Jan 2015
Pressure on oil prices has continued to build after key members of the Organisation of the Petroleum Exporting Countries (Opec) indicated there would be no let up in the cartel’s strategy of allowing the cost of a barrel to plummet.
Brent crude tested new six-year lows below $46 per barrel on Tuesday after the energy minister of the United Arab Emirates (UAE), a senior delegate among the cartel’s 12 members, said there would be no change in strategy despite the continued slide in the price.
“The strategy will not change,” said Suhail bin Mohammed al-Mazrouei, speaking in Abu Dhabi. “We are telling the market and other producers that they need to be rational.”
Mr Mazrouei added that it could take years for prices to stablise, adding: “We are passing through very interesting times…it is unlikely that we will see a sudden rise [in oil prices].”
The UAE, Saudi Arabia, Kuwait and Qatar form a core of Gulf Arab oil producers who dominate Opec policy due to their overwhelming oil reserves and production capacity. Combined, these four account for almost two thirds of the cartel’s production of around 30m barrels per day (bpd) of crude.
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