The price of oil tumbled down last week to the mid 60’s and remained at this level since then. OPEC’s decision to keep its quota unchanged has fueled this plunge in prices. But the main issue will also remain the expected changes in demand and non-OPEC countries’ production. Let’s review the latest developments in the oil market.
As noted in the media, the recent decision of OPEC to maintain its production quota at 30 million bbl per day led to a plunge in oil prices last week. According to one report, the main feud was between Saudi Arabia and Venezuela.
The main issue is whether this decision will result in U.S. oil producers curbing down their output. Some have suggested that OPEC’s decision was meant to do just that and for OPEC members such as Saudi Arabia to maintain their market share. As I have pointed out in the past, this country’s share in U.S. imports has gone down in recent months.
The rest of this analysis is at Seeking Alpha