OPEC daily basket price stood at $85.14 a barrel Tuesday, 14 October 2014
The cost of a barrel of crude oil hit a four-year low as reports suggested that Saudi Arabia was willing to maintain output at current elevated levels despite opposition from Venezuela.
The boom in US oil output has sharply cut the amount of crude the US imports from leading petroleum producers, and affecting prices. In July, the US imported no oil from OPEC member Nigeria for the first time since 1973.
The general belief is that the Saudis now appear to be betting that a period of lower prices, which would greatly affect the finances of some members of OPEC is okay in the short term. They feel that this will curb new investments in prospecting for more US Shale oil as the lower Oil prices would make new drillings even more expensive in the US Shale industry.
The International Energy Agency (IEA) said “Recent price drops appear both supply and demand driven,”. “Further oil price drops would likely be needed for supply to take a hit – or for demand growth to get a lift.”