Oil Price slide continues
Reuters reported that the Benchmark Brent crude oil front-month contract was down $2.10 at $59.59 a barrel after a session low at $59.37. Though investors had predicted a drop in the United States’ inventories by 2.3 million barrels last week, the inventories rather rose by 7.3 million barrels, against analysts’ expectations, according to EIA.
The market slide has triggered conspiracy theories, ranging from the Saudis seeking to curb the US oil boom, to Riyadh looking to undermine Iran and Russia for their support of Syria. Brent crude oil is projected to average $68 per barrel in 2015,
The stance maintained by Saudi Arabia signifies a new energy paradigm in the global oil market, which the kingdom is prepared to live with for as long as it takes, but is bound to hurt Russia, Venezuela and particularly Nigeria whose petroleum ministry has still not evolved an appropriate response to the emerging energy scenario.
U.S Energy Information Administration (EIA) has estimated that members of the Organization of the Petroleum Exporting Countries (OPEC), excluding Iran, will earn about $700 billion in revenue from net oil exports in 2014. Iran is excluded because current sanctions make it difficult to estimate revenues.
This represents a $121 billion or 14 per cent decrease from 2013 earnings and the lowest earnings for the group since 2010. Nigeria, which earned $84 billion last year, is estimated to earn $72.24 billion this year.
For consumers, the drop in energy prices has been a dividend.