Posted January 26, 2015
Who Will Rule the Oil Market?
The New York Times (Daniel Yergin): A historic change of roles is at the heart of the clamor and turmoil over the collapse of oil prices, which have plummeted by 50 percent since September. For decades, Saudi Arabia, backed by the Persian Gulf emirates, was described as the “swing producer.” With its immense production capacity, it could raise or lower its output to help the global market adjust to shortages or surpluses.
But on Nov. 27, at the OPEC meeting in Vienna, Saudi Arabia effectively resigned from that role and OPEC handed over all responsibility for oil prices to the market, which the Saudi oil minister, Ali Al-Naimi, predicted would “stabilize itself eventually.” OPEC’s decision was hardly unanimous. Venezuela and Iran, their economies in deep trouble, lobbied hard for production cutbacks, to no avail. Afterward, Iran accused Saudi Arabia of waging an “oil war” and being part of a “plot” against it.
By leaving oil prices to the market, Saudi Arabia and the emirates also passed the responsibility as de facto swing producer to a country that hardly expected it — the United States.
Read more: http://nyti.ms/1xZcrdW
More industry news:
EIA: Lower 48 Oil Production Outlook Stable Despite Expected Near-Term Reduction in Rig Count: http://1.usa.gov/1uSv4oe
Fueled by Oil, Agriculture Sector Welcomes Low Diesel: http://bit.ly/1CsoCou
Commentary: A Tale of Two States and the Perils of Ignoring Science on Fracking: http://bit.ly/1xYQ9Jj
State to Examine Oil and Natural Gas Potential of Monterey Shale: http://bit.ly/1CYIAW2
Obama Administration Moves to Block Drilling in Parts of Alaska: http://on.wsj.com/1BfDdzI
Fracking Bans Could Affect Retirees Relying on Mineral Rights: http://cbsloc.al/1DaRvUX
ABOUT THE AUTHOR
Mary Schaper is a Digital Communications Manager for the American Petroleum Institute. She previously worked on Capitol Hill for the Senate Energy and Natural Resources Committee as Digital Director and for Senator Lisa Murkowski. Before coming to D.C., she spearheaded digital strategy for Murkowski's successful Senate write-in campaign in 2010. Schaper enjoys traveling and taking in the local culture alongside her husband, their son and loyal springer spaniel.