THERE IS TOO MUCH OIL IN THE WORLD, BUT THE COMMON PEOPLE HAS TO PAY BIG-PRICE ! WHY ??????? There’s too much oil in the world, and not enough buyers. There are 2m barrels per day of crude oil production that don’t have a home, according to the International Energy Agency. Opec still controls about 40% of the world’s global oil output of 94.2m barrels a day. But the cartel’s control is slipping: output from non-Opec members like Russia and the US is rising. Crude oil prices are skidding, with both the global Brent benchmark and the US standard, West Texas Intermediate, at four-year lows. As of Wednesday Brent crude oil traded for around $80 a barrel, while WTI was around $74. And demand is down because of economic weakness in Europe and Asia, while supply is rising. Consumers are enjoying the low prices, as US retail gasoline prices average $2.81 a gallon – the lowest in four years, according to AAA. This is bad news for a cartel, which, after all, gets both its profits and its dignity from its power to control oil prices. In years past the cartel did a great job keeping oil prices high and stable. But those high, steady prices also undermined Opec: it provided room for US shale-oil producers to invest in their infrastructure and create this now-gushing supply of black gold that rivals Opec. US crude oil production is at a 30-year high and growing because of the river of cheap shale. Customers could also go directly to Russia, Mexico, Norway or other oil producers who don’t belong to Opec.
Posted on: Fri, 28 Nov 2014 05:08:44 +0000
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