Petroleum Africa
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Tuesday, December 23, 2014
Saudi Arabia, the longtime kingpin of the Organization Petroleum Exporting Countries (OPEC), due to its position as the group’s top producer has been able to convince fellow members of the cartel to keep the crude flowing despite the ever falling price of crude. According to the Kingdom’s Minister of Oil, Ali Al Naimi it is not in the group’s interest to cut oil output no matter how far prices may fall.
“As a policy for OPEC, and I convinced OPEC of this, even Mr al-Badri (the OPEC Secretary General) is now convinced, it is not in the interest of OPEC producers to cut their production, whatever the price is,” Naimi was quoted by MEES as saying. “Whether it goes down to $20, $40, $50, $60, it is irrelevant,” he said.
Naimi’s stance may be the position the cartel sticks with at the moment, but the longer prices continuing falling the more damage will be done to the majority of the economies of member countries, who depend on crude revenues. Algeria previously called for production and has been a vocal defender of higher prices as the oil price per barrel needed to balance its fiscal budget for 2015 is $130.50. Other Africa nations like Nigeria, face tough economic times ahead if oil prices do not do a reversal in the near future.
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